The Bank of England has held the interest rates at 5.25% for the second consecutive time.
This decision, welcomed by many, especially hints at a semblance of stability for homeowners and prospective buyers in Portsmouth.
The widely anticipated move came on the heels of September’s inflation figures, which remained steady at 6.7%, alleviating some pressure off the Bank’s Monetary Policy Committee.
The vote to maintain the rate was a majority of 6 to 3, indicating a cautious approach towards any further interest rate hikes amidst existing economic conditions.
This hold on interest rates brings a sigh of relief to around 2.2 million homeowners on variable-rate mortgages, who have been navigating through the rising tide of interest rates since December 2021. The average Standard Variable Rate (SVR) has soared from 4.4% to 8.2% over the past two years, making the current pause in rate hikes a breather for many.
However, many experts advise homeowners on SVRs to explore more economical options, possibly switching to better mortgage deals.
The steadiness in interest rates also signals a respite for those eyeing new mortgage deals. Recent times have seen a dip in mortgage rates, reflecting a competitive market scenario.
Notably, the best two-year fixed rates have dropped by one whole percentage point over the past two months. Additionally, more five-year fixed-rate deals are now available below 5%, which alongside the rate hold, could be indicating a phase of market stabilisation.
Despite the short-term relief, the Bank’s cautious stance resonates with the unpredictable nature of economic conditions, especially with potential upside risks to inflation from global scenarios such as the events in the Middle East. The Bank’s “wait & see” mode reflects a prudent approach towards any further tightening of monetary policy.
As a seasoned Portsmouth estate agent, we explore these market dynamics extensively in our articles on the Portsmouth property market.
Understanding these financial nuances is crucial for making informed decisions, whether you are considering buying, selling, or holding onto your property. If you are contemplating a move or curious about the current market value of your Portsmouth home, we offer free market appraisals with no obligations attached.
Stay informed by diving into our series of articles or reach out for a personalised market appraisal of your Portsmouth home to navigate through the steady waters of the current property market on 02392735863.
