Is the base rate going to rise?

As has been widely reported in the press, after years of low or falling rates, the UK’s inflation is on the rise. The increasing cost of everything from energy to clothing, building materials and property has meant it more than doubled between March and April, from 0.7% to 1.5%.

Although it has sparked fears we may be entering a new inflationary period, most economists (and the Bank of England) believe it is only a temporary blip and are not expecting it to have an impact on the base rate. They are attributing it to the release of pent-up spending that had been building during lockdown - something that is unlikely to be sustained over a prolonged time period. In addition, 1.5% is still some way below the BofE’s target of 2%. It is forecast to briefly creep over the 2% level sometime in the coming months but the Bank’s deputy governor responsible for markets and banking, Sir Dave Ramsden, is not unduly concerned and has said he will be keeping a close eye on the key indicators to make sure things stay on track.

To give you an idea of what current mortgage rates currently are, below is a selection of this month’s best buys from Moneyfacts.co.uk:

PURCHASE

Best two year fixed rates:1)1.17% from NatWest. Product fee £995. 60% LTV.

2)1.17% from RBS. Product fee £995. 60% LTV.

Three year fixed rates:1)1.18% from Co-Op Bank. Product fee £1,499.00. 60% LTV.

2)1.26% from Co-Op Bank. Product fee £999. 60% LTV.

Five year fixed rates:1)1.28% from NatWest. Product fee £995. 60% LTV.

2)1.28% from RBS. Product fee £995. 60% LTV.

Discounted variable rates: 1)0.99% For 2 years. From Hinckley & Rugby BS. Product fee £699. 65% LTV.2)1.31% For 2 years. From Cumberland BS. Product fee £1,999. 60% LTV.

BUY-TO-LET (BTL)

Best two year fixed rate: 1.19% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV.

Five year fixed rate: 1.64% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV

Best two year variable rate: 1.69% for 2 years. from Hinckley & Rugby BS. Arrangement £250. Completion £999. 60% LTV.

If you're thinking of buying (or renting) a property in Wokingham, Binfield, Jennett’s Park, Warfield or Bracknell, just give us a call at Sears and we can talk you through your options.

The information we provide is our personal opinion and should not be relied upon for financial advice. Should you need financial advice or guidance, please contact an appropriate professional.