In a crucial decision, the Bank of England's Monetary Policy Committee (MPC) chose to keep the UK base rate steady at 5.25% for the second time, breaking the pattern of 14 consecutive interest rate hikes since December 2021.
The prolonged series of rate increases has had mixed effects. On one hand, wages have finally outpaced inflation after a three-year gap. On the other hand, borrowers, especially mortgage holders, are struggling with record-high repayments, and remortgaging approvals have plummeted to levels last seen in 1999.
High-interest rates have also damaged property development, making the UK less appealing to investors. Mortgage approvals have hit an eight-month low, and inflation has eased from its peak of 10.7% to 6.7% as of September.
The data shows that the average 5-year fixed mortgage rate has dropped from 5.97% to 5.36% over the past year, reducing monthly mortgage payments for first-time buyers.
The Bank of England's decision to pause interest rates carries relief and challenges. It offers respite to borrowers but also raises questions about the property market's health and future lending practices.
As the UK navigates these economic waters, the hope is for a more stable and promising financial landscape. Contact our expert conveyancing team today to learn more.
Information gathered from Today's Conveyancer, see here.