Inflation rates fall to lowest in two years, and mortgage interest rates below 5%
- xxxxxx
- xxxxxx
As a housebuilder, we were delighted to see this week’s headlines confirming that UK inflation has sharply dropped to 4.6%; its lowest level for two years.
This drop has come off the back of lower energy prices, and it eases the fears that the Bank of England will raise interest rates again this year.
The year-on-year rise in the consumer price index was lower than the 4.8% predicted by economists, and below the 6.7% pace recorded for September. The Office for National Statistics figures mean inflation is at its slowest pace since 2021.
Chris Kelly, Head of Sales at Stonebridge Homes, said: “Although there has been some uncertainty with the housing market in the last year or so, with interest rates and energy price rises, Stonebridge have managed to weather the storm, and we’ve continued to sell in a challenging market. I’m sure that reduced mortgage rates, and the drop in inflation, will help to keep the property market moving.
“Now is a great time to buy. Just this week a couple of lenders have launched mortgage products to below the 5% interest rate. We are doing everything we can to help customers with buying a house too. From cash back and deposit contributions, to different ways to buy such as part exchange and assisted move, we’re doing everything we can to save people that little bit extra.”
As well as great deals and offers from housebuilders such as Stonebridge, mortgage lenders are bringing out new products with lower interest rates which is good news for buyers.
According to Money Saving Expert, fixed rates have also been coming down since the summer, with the top two-year and five-year fixes (for first-time buyers and home-movers) now sitting at 4.97% and 4.58% respectively. This is an important benchmark in the mortgage world, as they have been sitting at significantly over 5% for many months now.
Scott Richford, Mortgage and Protection Adviser at MAB New Homes, said: “I think things are definitely looking more positive. I believe it’ll be a steady 2024, with interest rates offered by lenders being more competitive and the Bank of England base rate perhaps coming down towards the end of quarter 2. It’ll be a more competitive marketplace for lenders next year, giving you the opportunity to secure plenty of deals. Although I don’t have a crystal ball, I personally don’t think that interest rates will ever go back to how they were a few years ago. I think there will be a new norm of around 4%-4.25% in the future, which is indicated by new products lenders are releasing all the time.”