The UK’s largest mortgage lenders, Halifax, Natwest, Virgin Money, HSBC, Barclays and Nationwide all announced significant cuts to their mortgage rates in August. Headline grabbing cuts by Natwest of upto 0.3pp starting from the 9th of August were particularly striking.
This is a clear indication that the UK’s major lenders are ready to fight tooth and nail for borrowers mortgage business. Andrew Bailey the bank of England’s governor commented last week that “we are much nearer now to the top of the cycle. And I’m not therefore saying we’re at the top of the cycle because we’ve got a meeting to come,” Bailey told lawmakers.
“But I think we are much nearer to it on interest rates on the basis of current evidence.”
It will be interesting to see if the base rate increases by another quarter precent at the next meeting and of course what happens with the all important inflation data. One thing is for certain though we seem to be reaching the peak of interest rates. Ben Thompson, deputy chief executive of the Mortgage Advice Bureau, says the current lay of the economic land “probably means we are approaching the most painful point in the rate cycle now, and next year ought to bring a little more stability and cheer to mortgage borrowers”.
We would suggest that buying property that doesn’t complete until late 2024 or ideally in 2025 would be ideal as by that point mortgage rates should have dropped well back from the current peak.
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