There has been some welcome news recently for property speculators investment planning in Cheshire. The Bank of England’s Monetary Policy Committee (MPC) agreed to deliver its second cut of the year, lowering them by 0.25% to 4.75%.
It is believed the recent drop in inflation may have influenced the MPC’s decision after they previously left rates untouched at 5% in September. Inflation now stands at 1.7% for the 12 months to September – down from 2.2% the previous month. This means that inflation has now dropped below target for the first time since April 2021, and stands below the markets’ forecast of 1.9%.
What does this mean for mortgage payments? While at face value the interest rate cut is positive news, there is no guarantee that property owners will reap the benefits. Some lenders are basing pricing on longer term trends, rather than in response to individual MPC decisions factored into mortgage deals – that said, the figures are considerably more favourable than this time last year.
Data published by Moneyfacts indicates that an average two-year fixed mortgage rate is now 5.4%, while an average five-year deal is 5.11%. This represents a big improvement on the equivalent 2023 figures, which compared at 6.29% and 5.86% respectively.
Mortgage lenders have said it is vital borrowers consider their long-term plans and assess their risk tolerance when identifying a suitable fixed-rate product. As for future rate fluctuations, the MPC will be looking to tread cautiously while keeping on top of inflation.
