The Bank of England has held interest rates at 5% on Thursday which will be a disappointing blow for borrowers.
The Bank of England boss Andrew Bailey said, “We should be able to reduce rates gradually over time… but it’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much.”
The hold comes as a result of slower economic growth and inflation sitting slightly higher than target at 2.2% for the last two months (July and August).
Guy Gittins, Chief Executive Officer, said, “The nation’s homebuyers will have understandably been hoping for a second consecutive rate reduction today, having already responded favourably to what was the first cut in four years at the start of August.
“Since then, we’ve seen an increase in buyers entering the market by way of strengthening mortgage approval numbers and they are doing so with far greater confidence, which is helping to cultivate a consistent level of upward house price growth.
“Whilst rates have been held today, this improving market momentum is only likely to strengthen further, as mortgage rates continue to trend downwards, putting the property market in very good stead for the remainder of the year.”
CEO of Octane Capital, Jonathan Samuels added, “The mortgage sector has been responding well to the market certainty that followed the Bank of England’s initial decision to hold rates at 5.25% and this market sentiment has only improved further following the base rate reduction seen at the start of last month.
“As a result, we’re not only seeing the rates offered on many products reducing, but the range of products available is also growing, with this greater level of choice helping more buyers to enter the market.
“Today’s decision to hold interest rates at 5.00% is unlikely to dent this growing market positivity and we expect more buyers to be tempted back into the fold, while the overall health of the UK property market will continue to strengthen.”
Leave a Comment