Despite the warnings concerning the housing market and the rapid ascent of house prices, the Bank of England’s Monetary Policy Committee (MPC) met the expectations of economists and left the historically low 0.5% standard base interest rate in place.  The rate has remained at 0.5% for over five years and while it would have been shocking for the MPC to move the rate upward, it is expected that discussion of the possibility of a rate hike did occur.  The minutes of the MPC meeting will be released later on this month.

Halifax released their latest report on housing prices and reported a second month of declining prices when compared to the previous month.  In a year on year analysis there was an increase of 8.5%.  This data may have slightly eased the concern of over demand in the housing market.  Just days ago the deputy governor of the Bank, Sir Jon Cunliffe, expressed concern that the rate of growth in the housing market could deter the country’s effort toward financial stability.

The Bank has left the rate for another month at its low level and currently the forecast for the first increase has been set for the first quarter of next year.  Lenders may not wait that long to increase the interest rates on their mortgage and remortgage deals.  The strong demand for mortgage and remortgage lending could push lenders to withdraw their cheapest deals and start to push them upward.

Homeowners and home buyers that choose to shop around now for an affordable and beneficial remortgage or mortgage will find that there are cheap deals out there.  It won’t be that way for long and if saving money, a lower interest rate and a long term fixed deal is the goal then shopping around now will be worth the effort.