Mortgage Rate Updates
Posted on 20th January 2025 at 15:46
The past week has certainly been topsy turvy for borrowers with some lenders increasing their mortgage rates and others announcing they are cutting them so how does this affect us.
We spoke to Roger Robertson, independent financial planner, and the start of the year has certainly not been what he was hoping for as we ended 2024 however he expects anyone applying for a new mortgage now to be able to get a better offer before they complete on their house purchase.
Economic output grew by just 0.1% in November, the latest Office for National Statistics revealed yesterday, missing forecasts of 0.2% but marking a return to growth after two consecutive months of contraction. This growth was fuelled by the services and construction industries, which offset a third consecutive monthly decline in manufacturing output.
Pressure is growing on the Bank of England to resume cutting interest rates next month following this official data and it appears that UK borrowing costs are set to be cut next month in what could be the first of multiple interest rate cuts in 2025.
The combination of weaker-than-expected inflation and economic growth means an interest rate cut in February is more than likely even though the economic outlook for this year remains precarious.
TThe increase in government spending and investment announced in the Budget should start to flow through and the early signs of a revival in consumer spending should continue but the lack of momentum going into the year raises the risks that 2025 under performs expectations.
The most recently available forecasts published by HM Treasury shows the City expects inflation and GDP growth to average 2.5% and 1.3% respectively this year with traders now expecting to see between two and three quarter-point cuts in 2025, taking the base rate as low as 4% by year-end.
For those of you looking to move home, buy your first home or re-mortgage anytime this year I would suggest speaking with an independent financial advisor as soon as possible. They will be able to keep you fully updated as the rates change and identify better options for you as soon as they become available.
It is worth remembering that if you are in the process of buying a property and already have a mortgage offer then it may be possible to switch to a new product before exchange of contracts if a better one becomes available. We recently had a buyer who switched product 4 times between having his offer accepted and getting the keys to his new home.
As always if you have any questions or require any guidance on this or any property related matter then please get in touch by calling 01452 260993, dropping us a message or emailing enquiries@rbwalters.co.uk
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