What’s in the news? February 2024
The cost of moving and stamp duty is putting millions of homeowners off of potentially downsizing.
Older homeowners are unable to move to smaller properties because of the financial burden that comes with a house move, and this further creates a lack of suitable properties for younger families to purchase. The high cost of stamp duty is discouraging people from moving, even if it means they can free up cash. https://www.thisismoney.co.uk/money/mortgageshome/article-12710319/Stamp-duty-cost-puts-millions-downsizing.html
Nationwide U turns on mortgage rates for new borrowers in February 2024
Just 6 days after reducing rates by up to 1%, Nationwide announced an increase in mortgage rates for new borrowers, effective from 2nd February. The changes affect two-year and five-year remortgage deals, with rates rising by up to 0.3 percentage points.
Here’s a breakdown of the new rates:
- Two-year remortgage: Starting from 4.45% with a £1,499 fee
Five-year remortgage: Starting from 3.94% with a £1,499 fee
Both rates apply to mortgages with a 60% loan-to-value ratio.
Bank of England rate decision: February 2024
The Bank of England has decided to hold interest rates at 5.25%, which is good news for borrowers as it means their loan repayments won’t go up. This decision comes as inflation, the rate at which prices rise, has been falling faster than expected. However, the Bank is still cautious because some signs of high inflation remain, like wages continuing to rise.
Here’s a breakdown of what this means:
- Good news for borrowers: No increase in interest rates means you’ll keep the same loan repayments.
- Inflation is cooling down: Prices are rising more slowly, which is good for everyone’s spending power.
- But caution is still needed: Some signs of high inflation are lingering, so the Bank might raise rates again in the future.
When will mortgage interest rates go down?
Interest rates in the UK were at an all time high in 2023, with modest decreases at the start of 2024. The Bank of England is trying to control inflation, but this has slowed the economy and increased mortgage costs. Some analysts predict rates will fall by the end of 2024, and there are plenty of interested parties waiting to see what will happen with the mortgage market.