The Bank of England’s Monetary Policy Committee (MPC) has chosen to freeze the Bank Rate at 5.25%.
The nine-member committee voted by a majority of 6–3 to maintain the Bank Rate, while three members wanted to increase the rate by 0.25 percentage points, to 5.5%.
Phil Lawford, National Account Manager at Saffron for Intermediaries, comments:
“It is no real surprise to see the Bank of England maintain the base rate as it looks to restore stability after a fairly volatile year for the mortgage market. This should help to instill some much-needed consumer confidence, and in turn, drive market activity. A lot of buyers are still sitting on their hands hoping to see rates return to the record lows we saw during the pandemic, and, while rates are still competitive, it is unlikely that they will fall significantly in the next year.
“Brokers need to continue reassuring borrowers that there are solutions available that will work for them, and that they should press ahead with their homeownership ambitions if the circumstances are right for them. Rates can be unpredictable – for example, if you wanted to buy a house in 1971, when rates sat around 7%, but held off until they reduced, you would have been waiting for 22 years.
“And although it is often the focal point, the mortgage rate is far from the only factor that brokers should be highlighting to clients, particularly in the complex lending market. Brokers and client should both be thinking holistically as they look to find the best solution for their borrower’s individual circumstances, a task Saffron is always more than happy to help with.”
Alex Lyle, director of Richmond estate agency Antony Roberts, added: “Buyers relying on mortgages to fund their purchase have been waiting to see what happens with rates, as this has such an impact on affordability. Even those who don’t need to take out a mortgage will take note of general market trends, with interest rate movements being one of the biggest drivers behind buyer decision-making.
“Another rate hold will be viewed as another step in the right direction, fuelling hopes that longer-term stability on rates is on the way and that they might even start to come down in the not-so-distant future. This should increase confidence in those who have been anxious about committing to a property purchase, so is encouraging for the market as we move into a new year.”
