Bank of England holds Base Rate at 3.75%: Takeaways for advisers and landlords

With the Bank Base Rate remaining unchanged once again, our Chief Commercial Officer, Steve Cox, explains what this means for advisers and their landlord clients.

“The Bank of England’s decision to hold Bank Base Rate at 3.75% feels like a continued common sense approach given the current backdrop. While inflation remains a concern, and the renewed conflict in the Middle East and future energy price hikes are likely to push it higher in the months ahead, there are still enough questions surrounding wider economic growth levels to justify keeping rates where they are for now. The decision will certainly be welcomed by the new Prime Minister and Chancellor, who have set an early stall out to ease the cost of living rather than adding to it, and will not have wanted to see monthly mortgage bills rising for some so soon.

“From a buy-to-let perspective, today’s decision should not be viewed in isolation because the mortgage market has already been responding to changing economic conditions over recent weeks. Higher swap rates and funding costs have prompted a number of lenders to increase pricing, meaning mortgage rates have effectively been moving ahead of the MPC. For landlords, particularly those approaching a remortgage or considering their next purchase, waiting for greater certainty may not prove to be the right strategy. The next MPC meeting is not until September, a great deal can happen between now and then, and the direction of mortgage pricing will be determined just as much by funding markets and geopolitical developments as it will by Bank Base Rate itself. I would suggest that advisers make clear to clients that the time to act is probably now rather than adopting a wait and see attitude.”