There is almost zero chance the Bank of England’s Monetary Policy Committee (MPC) will cut the standard base interest rate this month. The next meeting is on 9 May and will likely end with a majority vote for keeping the rate steady at 5.25%. Inflation is dropping, but not yet at the Bank’s target rate of 2.0%. It is nearing the point where the rate will be cut, but not likely until early autumn. Expectations are for at least one rate cut of 0.25% by the end of the year.

Homeowners might be finding it difficult to decide whether to remortgage now or wait. This is especially a trying decision for those coming to the end of a two-year fixed rate mortgage obtained in 2022. There are also those homeowners who have already had their term end and have allowed their lender to move them to their standard variable rate (SVR) and are waiting out for lower rate remortgages. The Bank of England’s Monetary Policy Committee (MPC) will meet in a few days, and it is not expected a vote to decline the rate will occur in May, so the wait will be longer for a cut to the current 5.25% base rate.

For the seventh consecutive month, the UK housing market has experienced growth. This is despite the continued strain for home buyers due to expensive borrowing. This is even more so in April than the first three months of the year. Lenders had begun to lower their mortgage rate deals as a large reaching competitive lending market emerged due to optimism for an early spring cut to the base rate by the Bank of England’s Monetary Policy Committee (MPC). Fast forward to the end of March and forecasts became less optimistic which triggered the lowest rate mortgages to disappear from the lending market. 

Every homeowner was once a first-time home buyer. For many the journey from considering the idea of climbing on the property ladder to years of homeownership is a complete unknown. There might be friends and family to ask for advice, but the housing market of today is much different than just ten years ago. Advice from then might not translate well for current buying conditions. There are so many decisions to make in shopping for a property and then comes shopping for a mortgage and a lender. Once the mortgage is secured and the property keys in hand, a new first-time home buyer should be able to take a deep breath, exhale, and leave all the stress of borrowing behind. Make the repayments on time and all will be good. However, the first mortgage is not likely to be the end of a homeowner’s relationship with borrowing and lenders.

Could it be true that rates are rising despite there were no increases to the standard base interest rate by the Bank of England’s Monetary Policy Committee (MPC)? The answer is yes. There was not a meeting scheduled for April, so the rate stayed as it was in March, voted 8-1 to keep the rate steady at the 16-year high of 5.25%. The next MPC meeting is on 9 May, and yet again there will probably be a vote to keep the same rate and no cut. Certainly, the odds are totally against there being a rate hike. For in March, the first time in two years, no member voted to increase the rate, while one voted to cut the rate.

The housing market in the UK is again showing how resilient it can be as house prices are increasing despite continued higher interest rates. Not only are interest rates higher than only two years ago, but the average asking price remains at a level straining home buyers as they try to get on the property ladder. First-time home buyers are especially impacted as they are finding it hard to buy with higher prices and higher borrowing costs as well as attempting to save for a deposit following a global pandemic and double-digit inflation.