The Bank of England’s Monetary Policy Committee (MPC) will be meeting again towards the end of September on the 23rd. Only days later, the stamp duty holiday will come to an end on the 30th. Both of those events could very well impact the housing market. The big question is if the MPC meeting will result in interest rates increasing.

It was noted last month that the level of inflation is likely to increase to 4% by year end. The target rate is 2%. At nearly double, it would seem that the MPC would take action quickly to control inflation and increase interest rates. However, they might take a wait and see strategy.

The delta variant of Covid-19 is impacting attempts at our progress to emerge from the pandemic’s pressure on the economy. While jobless numbers are improving, they are not yet near the level prior to the pandemic. Consumers are not yet confident, and no one can forecast confidently if we are ahead and making strides with the pandemic due to vaccinations or unaware of another unexpected surge.

The housing market has been a strong and steady sector of the economy. Not only are home buyers busy in the market, but associated businesses with moving home as well as improvements and decorating are doing well. 

The end of the stamp duty could result in a lack of interest, especially with first time buyers and landlords interested in starter homes for their rental portfolio. The end of a savings from taxes could dampen demand strongly.

Interest rates remaining low and keeping borrowing cheap would help to keep buyers in the housing market, even though asking prices in some areas are still putting some hopeful home buyers out of reach. 

The low interest rates are helping homeowners to save money with a remortgage as well.

There are other factors at play that would indicate that September will likely not be the month that the MPC increases the Bank’s standard base interest rate. As the end of the stamp duty holiday occurs, it will help determine how much of a motivator the discount was in pushing buyers to take action. By the next meeting of the MPC, which will be in November, there will be a clearer picture as to what action is needed due to the housing market, inflation, and the pandemic in general.

Meanwhile, rather than miss out on the low interest rates available now, those considering a mortgage or remortgage will find borrowing is cheap and deals are varied and abundant. Shopping online with brokers and lenders will offer information on what opportunities are available during this time when the Bank’s rate is the lowest it has been in over 300 years. 

With the availability to save substantially, it could pay off to do some research shopping online and then make borrowing a priority as the best deal discovered could to put a borrower into a new home or allow a homeowner to save over their previous deal with a remortgage.