Introduction to Interest Rates
The Bank of England has decided to keep the base interest rate at 4%, despite signs that the housing market is slowing down. This decision was made by the Bank’s Monetary Policy Committee (MPC) and Governor Andrew Bailey, with 7 members voting for a hold and 2 voting against.
The Reason Behind the Decision
The Office for National Statistics recently released figures showing a 2.8% increase in house price growth in the year to July, which is down from 3.6% the previous month. Additionally, the inflation figure remains at 3.8%, which is above the Bank’s 2% target. The next interest rate decision will be made on November 6, before the Budget on November 26.
Industry Reaction
Estate agents and other industry professionals have shared their thoughts on the decision. Amy Reynolds, Head of Sales at Antony Roberts, believes that a drop in rates is needed to boost affordability in the housing market. She suggests that a half-point cut would be more effective than a quarter-point cut. Kevin Shaw, National Sales MD at LRG, is not surprised by the decision, citing modest GDP growth and high inflation.
Estate Agents’ Perspectives
Paul Hardy, Managing Director of LSL Estate Agency Franchising, expects the housing market to remain stable, with little change expected before the end of the year. Jeremy Leaf, a north London estate agent, believes that the decision will lead to more buyers and sellers being cautious, and that sellers should be prepared to price their properties keenly.
Lenders’ Views
Gareth Lewis, Deputy CEO of MT Finance, thinks that the decision demonstrates the Bank’s commitment to controlling inflationary pressures. Simon Gammon, Managing Partner at Knight Frank Finance, believes that the decision suggests that the Bank is waiting for more evidence that inflation is easing before making further changes to interest rates.
Brokers’ Insights
Nicholas Mendes, Mortgage Technical Manager at John Charcol, expects that mortgage pricing will remain stable, with little change expected before the next interest rate decision. Nathan Emerson, CEO at Propertymark, believes that the decision will provide reassurance to homeowners and those looking to take out a new mortgage.
The Impact on the Housing Market
Matt Smith, Mortgage Expert at Rightmove, thinks that the decision will lead to average mortgage rates continuing to rise in the coming weeks. The later-than-usual Budget has added to the uncertainty in the market, with many waiting for answers until the end of November.
Conclusion
In conclusion, the Bank of England’s decision to maintain the base interest rate at 4% has been met with a mix of reactions from industry professionals. While some believe that a drop in rates is needed to boost affordability, others think that the decision is necessary to control inflationary pressures. The impact on the housing market remains to be seen, but one thing is certain – the decision will have far-reaching consequences for homeowners, buyers, and sellers alike.
