For the second time this year, the Bank of England’s Monetary Policy Committee (MPC) voted to reduce the standard base interest rate by 0.25% to 4.75%. The previous 5.0% base rate was from the first majority vote by the MPC to reduce the base rate of 5.25% to 5.0%. The reduction decision came in August, remained steady through September and with no scheduled meeting in October stayed at 5.0%. The two rate cuts for 2024 are a welcomed decision for borrowers as there had not been a reduction to the base rate since March 2020 when the MPC voted an historical low of 0.1% during the pandemic.

Those that have made the investment into buying their own home will be thrilled to hear there is likely to be strong growth in property values in the next five years. This is due to the expectation of the housing market thriving in the years ahead and taking on an average growth of £84,000 by 2029. The forecast from Savills is yet another one that backs the outlook of a strong and growing economy.

This Thursday, the Bank of England’s Monetary Policy Committee (MPC) will meet for one of the last two meetings of the year. This meeting is particularly important as it is expected it will result in a majority vote by the committee to reduce the standard base interest rate. The current rate is 5.0% and with the projected cut of 0.25% the new base rate will be 4.75%. If the cut does occur, it will be the second of the year.

UK house prices have slowed according to the recent release of data by Nationwide. Annual growth for the month of October was 2.4%, down from the two year high reported in September of 3.2%. This was unexpected as little changed from the prior month in mortgage rates and there remained the forecast for another rate cut by the end of the year. Worry about the housing market is misplaced as there is a strong boost to the housing market expected in the new year as the stamp duty changes motivate home buyers to take advantage of savings and buy.

Next week the Bank of England’s Monetary Policy Committee (MPC) will be meeting for the first time since their September meeting. It was in August that the standard base interest rate was cut for the first time since March 2020. The majority vote by the committee took the sixteen-year high base rate from 5.25% to 5.0%. The September meeting resulted in a vote to stay the rate, but the expectation was for at least one more rate cut by the end of the year, leaving that possibility for November or December since there was not a meeting scheduled for October.

Loyalty is a virtue which we would like to see more of in the world, but alas, it has no place in our financial world as it once did for personal mortgage lenders. Long ago one might have had a lengthy relationship with the lender that said yes to their first mortgage. In helping a homeowner find their way onto the property ladder, the lender would likely have a lifelong customer and perhaps even generations of customers. However, holding onto that mindset could be costing homeowners money in today’s world and having them paying more than necessary.