Financial markets have factored in a 60% probability of a mortgage interest rate cut on Thursday, with industry leaders optimistic that lower borrowing costs could stimulate home sales. According to the Bank of England, the UK saw a “broadly stable” number of mortgage approvals last month. Official figures released on Monday, July 29th, show that there were 59,976 net approvals in June, a slight decrease from May’s 60,134. Additionally, net mortgage borrowing rose from £1.3bn in May to £2.7bn in June.
This data precedes the Bank’s upcoming interest rate decision on Thursday. Analysts believe these figures indicate a “strong foundation” for continued growth in the housing market, which seems largely unaffected by the recent general election. However, they warn that much will hinge on the anticipated rate cut later this week.
Improved mortgage offers on the horizon
Industry experts are optimistic that a decrease in borrowing costs will stimulate home sales, as more attractive mortgage deals entice potential buyers. Despite interest rates being maintained at 5.25% for seven consecutive periods, financial markets now predict a 60% likelihood of a rate cut on Thursday, up from last week’s 46%.
Recently, Nationwide became the first major lender to offer a mortgage deal below 4%, followed by reductions announced by Barclays and TSB the next day.
Chief executive of easyMoney Jason Ferrando said:
Bank-rate decision pending
Lucian Cook, from estate agent Savills, said:
Alice Haine, from investment platform Bestinvest by Evelyn Partners, said:
