Reduction in Inflation
After an uptick in March, UK inflation reduced in April to 2.8%.This may sound surprising given the continuing global situation, but the expert consensus is this drop was down to an already planned cut in the UK energy price cap.
Future Interest Rate Changes are Still on the Cards
For homebuyers and businesses, the forward look is still uncertain as the conflict in Iran continues and “current inflation data may not fully capture the secondary effects of rising energy and supply chain costs”. The expert thougts are that further rises and volatility to the market are still incoming.
What’s Happening Right Now?
What I am seeing on the ground as an advisor reflects this. In mid to late April there was a flurry of lenders dropping fixed rates for the first time since the conflict began. This was a refreshing relief and great news for a few clients where we managed to slip their mortgage application into that window.
Then literally in the second week of May……back to notifications of rate increases and that products are being pulled while lenders re-evaluate the offering. A product I secured for a client a week ago has now gone up by 12bps (basis points). What does that mean in practice?
For a £250K mortgage on a 25-year term, that is an extra £17 a month. Doesn’t sound like a lot? It’s an extra £204 a year or £1,020 over a 5-year initial product term. What could you do instead with that £200?
Jamie’s View – What Does This Mean For Buyers?
What does this mean for your homebuying journey? As I’ve said before, you need to consider everything for your personal situation and what is right for you. But don’t get stun-locked. Waiting for “tomorrow” may become waiting for forever when so many elements are outside of our control.
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