Inspiring Business by Sharing Success

BOE Rate Announcement 20th December: Rob Clifford, SDL Group

Speaking ahead of the Bank of England’s base rate announcement on 20th December, Rob Clifford Property expert at SDL Group believes the mortgage market will remain stable, in spite of Brexit.

“It’s my view that we won’t see any further interest rate rises this year. Any change is likely to come in the middle of next year at the earliest, depending on the outcome of Brexit, and even then, it is not going to be dramatic – probably another 0.25 per cent increase to curb inflation. 

“Despite the speculation around Brexit, most homebuyers are getting on with their lives and their decision to move is very often based on personal factors such as divorce, changing family size or relocation for work. They can’t sit on their hands forever, so many are prepared to apply for a mortgage even if they wonder whether it is a sub-optimal time to buy a new property.

“We should remember too that, amidst the macro-economic uncertainty, mortgages are  affordable for most people. There is very healthy competition in the mortgage market, with growing numbers of new lenders and challenger banks developing innovative products for applicants with complex financial circumstances, lower deposits and/or who are buying non-standard properties.

“Nobody believes that interest rates are going to rocket in the coming year and they are likely to remain predictably low. And although less probable, you can’t rule out other scenarios such as the Bank of England cutting rates following a disorderly Brexit, or being forced to hike them to prevent a run on the pound. 

“The mortgage market is currently in good shape and stable, bolstered by a rise in remortgaging as consumers continue to switch to fixed and better rates. Many of those facing affordability challenges in the event of rate rises have already addressed these and locked into safer deals, so I don’t anticipate a surge in activity ahead of a further rise. While lending volumes won’t race ahead, they certainly won’t drop off a cliff. Over the coming quarter, the market should remain predictable and stable with subdued year-on-year growth.”

< Back