Before the election, most experts were predicting that the Bank of England base rate would start to come down this summer. And because the election result was exactly what was expected and inflation is now near its target rate of 2%, the financial markets have remained stable. As such, the base rate decreased from 5.25% to 5% on 1st August.
Capital Economics is currently forecasting that the downward trend will then continue, and the base rate will be at 3% by the end of 2025.
This is all great news for borrowers as mortgage lenders have already been reducing the interest they’re charging, in anticipation of the cuts.
“Fixed-rate mortgages are actually quite keenly priced today - and whilst it is hoped that the base rate will fall further over the coming year, it is entirely possible that any new fixed-rate deals on offer, won’t necessarily keep pace.”
While the base rate has a major effect on mortgage rates, the other contributing factor is competition between lenders.
So, as consumer confidence increases over the coming months, we expect that lenders will do as much as they can to make their products more attractive.
Even if the interest rate doesn’t change much for the rest of this year, borrowers could see things like fees reducing and mortgage cashback incentives.
What should landlords do next?
If you’re thinking of making a new investment or your current fixed deal is coming to an end in the next 6-12 months, it’s well worth working with a Buy to Let specialist broker, like our partner Embrace Financial Services, who can access a wide range of deals and make sure you know about the very latest offers.
Bear in mind that around two-thirds of Buy to Let products are broker-only deals and not available to you as an individual borrower going direct to a lender.
Also, when the property market is busy, mortgage products tend to change more often as popular products ‘sell out’ and are replaced. Having a broker working on your behalf can help ensure you don’t miss out on the best deals.
If you would like to discuss your own borrowing requirements, get in touch with our partner Embrace Financial Services for a no obligation initial appointment.
Book a no obligation Buy to Let mortgage appointment
Most Buy to Let Mortgages are not regulated by the Financial Conduct Authority
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