The Bank of England once more in June voted to keep the Base Rate at 0.5%. It has been at this level for over 7 years now.
The predictions for if and when a rise in this rate will happen do vary (and may change a lot more now) but the general consensus is that this could be as far off as 2020. Investors are anticipating an increase to 0.75% by May 2020.
So the good news is that we should have some stability in interest rates and the cost of mortgages is not due to rise for a considerable time. Once again, enjoy this while you can!
The two main indices that we follow are from Halifax and Nationwide respectively. They do tend to have differing results but the trends from each are good to follow.
Halifax posted the following results on house prices:
May 2016 - increase of +0.6%
Quarterly change - increase of +1.4%
Annual Change - rise of +9.2%
Nationwide were a little more conservative:
May 2016 - increase of +0.2%
Annual change - +4.7% rise
So homeowners can be comforted that house prices are still on the up and decent gains have been made over the last year.
What is causing this rise?
Halifax believe that it is low interest rates, increasing employment and rising real earnings which are continuing to support demand. This demand is causing prices to rise briskly. However, increasing affordability issues caused by a higher than earnings house price growth, should curb demand and result in a growth slowdown as the year progresses.
This view is shared by Nationwide who suggest that house purchase activity is likely to fall in the months ahead.
The Mortgage Market
The market as a whole remains fairly buoyant. Interest rates are low and lenders are showing an appetite to lend.
With rates under 1.5% for a 2 year fixed rate with a 25% deposit, I have never seen offers so low and so now is a good time to review your deal to make sure you are getting the best you possibly can.
Lenders are still asking for a lot of paperwork and continue to be tick-box orientated when it comes to criteria (as opposed to using common sense) but on the whole they will try to say "yes" - unless it is an interest only mortgage!
So let's just see what happens to the markets and predictions over the coming months as we come to terms with leaving the EU and head into the unknown.
Should you wish to discuss anything regarding your mortgage or look for a better deal, please do not hesitate to contact me by email at firstname.lastname@example.org or call me on 0844 736 1920.
YOUR PROPERTY IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE