By Interest rates have risen to 5.25% following a 0.25% increase announced by the Bank of England.
This is the 14th consecutive rise and marks the highest interest rate in 15 years.
The reason behind these rate hikes is to combat high levels of inflation. The government has set a target of 2% inflation, and the recent inflation rate drop to 7.9% in June has been better than predicted by the markets.
As a result of these inflation figures, mortgage rates have slightly decreased recently. Experts anticipate that mortgage rates will continue to fall gradually in the coming weeks. The positive inflation numbers have given the market confidence that inflation will continue to decrease, leading to a more optimistic outlook and potential further rate reductions.
If you are a Torbay or Teignbridge homeowner or landlord and have a fixed-rate mortgage, your monthly payments will remain unchanged until the end of your deal. However, if you're on a variable or tracker mortgage, your payments are likely to increase.
The Mortgage Lenders Charter, launched in July, aims to assist those struggling with monthly payments and those nearing the end of their fixed-rate mortgages by allowing borrowers to secure a new deal up to six months before their current deal ends.
The Bank of England's Monetary Policy Committee meets regularly to determine whether interest rates should rise, fall, or remain stable. It is expected that the Base Rate may peak at around 5.75% in early 2024 and then start to decrease in the latter half of the year. The next decision on interest rates will be announced on 21 September 2023.
For local homeowners, this uptick in interest rates to 5.25% might raise questions about its impact on the Torbay & Teignbridge property market.
However, it's important to note that the local property market has demonstrated its resilience and adaptability time and again. The gradual nature of these interest rate increases means that they have already been considered and priced into existing mortgage rates.
This factor could act as a stabilising force, offering homeowners a sense of reassurance.
The current environment might present opportunities for those considering property-related decisions, and the South Devon property market, known for its consistent growth, should continue to hold promise.
If you are a local homeowner or landlord and would like any free, no-obligation property advice, please get in touch on 01803 214214.
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