If you read back to my update on 23rd September 2014, I was pretty confident that interest rates would not rise until the first quarter of 2015. According to the experts, this may be a bit premature!
With inflation running at just 1.2% (well below the target of 2%), poorer than expected growth and wobbles in the stock and bond markets, it seems we may have a little longer before interest rates start to go up. Predictions now mainly focus on this happening in Summer 2015.
The chief economist for the Bank of England has stated that he is "gloomier" about the economy than before which is likely to lead to interest rates staying lower for longer.
IHS Global Insight now believe that mid 2015 is also the probable timing of the first rise with the Bank of England Base Rate climbing to 1% by the end of 2015, 2% by the end of 2016 and 3% by the end of 2017.
So there is certainly a groundswell of opinion that gives us a little longer before mortgages start costing more. There is always a positive to the economy not doing so well!
House prices also took a little dip in September. According to Nationwide Building Society's House Price Index, house prices actually fell by 0.2% in September but this still means an annual increase of 9.4% compared to September 2013. Before getting too gloomy about this, the last 3 months have still seen a strong rise and underlying demand remains strong.
This certainly seems true locally where properties are still being snapped up quickly if they are priced correctly but there have been murmurs that there is just not enough coming to the market at present. Now that summer is out of the way and Christmas looms, perhaps we will see a flurry of activity over the next couple of months.
Although I may have to change my opinion on when interest rates will rise, I remain positive that this is a great time to get a mortgage. You may have to jump through some hoops to get one - but rates are low and competition is fierce amongst the lenders.
If you wish to discuss anything regarding mortgages, please give me a call on 0844 736 1920 or email firstname.lastname@example.org.