This month, we’re delighted to announce that there’s some good news for East London homebuyers. At the last of its regular, six-weekly meetings, the Bank of England’s Monetary Policy Committee decided to shave a further 0.25 per cent off mortgage rates.
That means the current mortgage base rate in the UK now stands at 4.5 per cent, and mortgage lenders are busy creating new deals to reflect this change. The new rate will benefit all mortgage dependent homebuyers and investors.
Our estate agents in Ilford agree with our Newbury Park estate agents that we are seeing stronger than usual activity in the local housing market in response to the Bank’s decision. Read on to discover the latest news on mortgages and what it means for you if you are remortgaging or buying a property this year.
Why has the base rate fallen?
The Bank of England (BOE) uses the base rate as a tool to control inflation. Not so long ago, inflation rose to a 40 year peak of 11.1 per cent, driven upwards by high energy costs, rising food prices and a number of geopolitical factors. Since that time, inflation has gradually fallen, although at 3 per cent – the rate recorded in January – it remains slightly higher than the BOE’s target of just 2 per cent.
A fall in the base rate reduces the cost of mortgages, so lenders can offer more favourable deals. Lower mortgage rates are good for economic growth as they leave more cash in homebuyers’ pockets and stimulate the housing market. For this reason, the BOE will be keen to introduce further cuts where possible.
If inflation remains higher than the target, however, the Bank is likely to take a ‘slow and steady’ approach to any further reductions. Last year, when the base rate stood at 4.75 per cent, financial markets predicted we would see four more 0.25 per cent cuts in 2025. The year’s first cut has just been announced, but if inflation stays above the 2 per cent target, the Bank may limit itself to just two further cuts. Economists predict that the base rate could fall to 4 per cent by the end of the year.
What will the Bank of England Base Rate cut mean for me?
If your fixed-rate mortgage is coming to an end, you may be able to negotiate a cheaper deal when you remortgage your property. At the time of writing, an average two-year fixed-rate mortgage is currently at 5 per cent interest, with a five-year fixed-rate deal available at 4.79 per cent. Lenders often vary the cost of their mortgage products, so always check out the latest deals.
For those on a tracker mortgage, the recent base rate cut will be reflected in your monthly payments. This means you’ll pay less going forward.
The outlook for borrowers continues to be stable, so if you are considering buying a property in east London, this is a good time to start your search.
Is this a good time to move home?
Rightmove recently reported that February and March are the best times of the year to list a house for sale. Since 2012 almost seven out of ten homes (63.3 per cent) put on the market between February and March have gone on to complete successfully. If you are selling your home, the first step should be to get a free, no-obligation property valuation.
Spring is also one of the best times of the year to start your home search, as more properties come to market, giving you greater choice. For many families, buying in spring can be an advantage, as timings fit well with the school year. As a buyer, you are advised to get a mortgage offer in principle so you can move quickly when you find your dream home.
Property values may have settled since the post-pandemic house price boom of 2021/22, but that doesn’t mean prices will stand still this year. Rightmove has reported “promising signs of home-mover activity” in January and February and buyer demand is up 8 per cent compared to the same time last year.
As more employees return to the office and with better mortgage deals already available, experts are predicting that property prices in London will rise by 4.5 per cent this year.
East London still offers excellent value for money, so if you are considering moving to Greenwich, Hackney, Havering, Newham, Redbridge, Tower Hamlets or Waltham Forest, why not call us on 0203 972 7341? Our deep knowledge of these areas means we can offer invaluable insights to help you choose the perfect location. You can also expect impeccable personal service and support that extends all the way from the initial offer to completion.
