HOMEOWNERS could see mortgage rates fall next year as inflation eases and base rates rise less than anticipated.
Interest rates were raised to 3% this month – the highest level since the 2008 financial crisis. It was the eighth consecutive month that the Bank of England increased the rate, pushing it to its highest level for 14 years.
However, the UK’s central bank also expressed the belief that inflation would begin to fall by the middle of next year and that this could decrease quite sharply.
Several lenders across the market have now reduced their fixed rates in the last week and looks set to continue.
Gary Dobson, senior mortgage and protection manager at property expert Bradley Hall, said: “Although it’s undoubtedly a difficult time for consumers at the moment – and those with mortgages or looking to buy have been particularly effected by interest rate rises – there are some positive signs coming through.
“The base rate has not increased as much as had been feared and we could actually see mortgage rates reduce as the Bank of England’s rate is lower than what has been priced in by the financial markets.
“Despite the interest rate volatility, demand remains high, with lots of enquiries coming in from people looking to buy.
“And there are some demographics that will benefit from a change in the market, with first-time buyers being one of the potential winners.
“We’ve seen affordability ratios getting continually stretched and if this eases it could allow more people to realise their dream of owning their own home.”
