Expect Mortgage Rate Falls

Expect Mortgage Rate Falls.

Many mortgage lenders are reducing their interest rates to an all-time low as pressure mounts on the Bank of England to reduce interest rates as well as lenders needing to compete in a property market that is slowing down.

The Royal Institute of Chartered Surveyors has already suggested that the numbers of people looking to buy property has fallen dramatically since the EU referendum.

Many predict that the Bank of England will reduce interest rates later on this week and it appears that mortgage lenders are trying to 2^nd guess the Bank of England by reducing lending rates before there has been any cut.

Comment

Given that Article 50 of the Treaty of Lisbon has not yet been triggered and therefore it could be many months or even up to 2 years before we know what trading relationship we will have with the European Union, we suspect that speculation on interest rates being cut later this week may be a little too early. Stock markets are also rising on the back of the same speculation and again we believe this to be premature. We will not be surprised if interest rates are actually maintained this month and maybe even for a few more months yet. We will know more when the new prime minister has talks with her counterparts in Germany and France. As we keep on predicting, we expect a "rocky" summer for investment markets.