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January 2024 Newsletter

Happy New Year! 

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it's been a wild ride in 2023, although the economy is not out of the woods quite yet, predictions are looking far more positive than previously expected at this stage, we should all be comfortably hopeful for a better year in 2024.

Latest News

As I'm sure we are all aware at this stage, the reason for soaring interest rates in 2023 has been a stubborn inflation rate which was 10.1% at this time last year. 

The main, or in fact, the only tool in the Bank of England arsenal to combat this was to increase the cost of borrowing and reduce spending. They did this by increasing the Bank of England Base Rate.

 

After hefty increases in the base rate across 2023 and reductions in fuel and energy prices during the latter part of 2023, inflation dropped to 3.9% in November 2023, it's lowest level in two years. 

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This is incredible news and has altered analysts predictions for the coming year, with Price Waterhouse Cooper predicting that we will come close to hitting the Bank of England target inflation rate of 2% during 2024. 

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Even with these challenges around inflation and a Bank of England base rate set at 5.25%, it's highest level in 15 years. I've noticed that the first time buyer market has been healthy with many purchasers taking advantage of increased buying power and property price reductions. 

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The main challenge has really been for the buy to let market where mortgage stress testing at a higher interest rate has impacted affordability and lowered profitability for landlords. 

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It has also hugely impacted homeowners who have been faced with far higher monthly mortgage payments on their remortgages and unattractive rates for additional lending when considering moving property. 

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Thankfully with the market settling and with positive movement in the inflation rate, in part thanks to the above challenges, we're now seeing lenders bring down their interest rates to reflect this more positive outlook.

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I have included a couple of purchase examples detailing the change in interest rate from September to now. 

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Mortgage Rates Today

With this slight reduction in rates, I've already seen improvements to the Buy to Let mortgage options and the profitability available. As for remortgaging, the rate has made a difference, but not nearly enough as yet.

 

There is currently no aggressive bounce back or dramatic drop in interest rate expected for 2024. However, as inflation continues to improve, and lenders reduce their fixed rates in line with market predictions, it looks as though 2024 could be a far more promising year than previously expected.

Jen Boulter

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBT SECURED ON IT.

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Jennifer Boulter trading as Boulter Mortgages is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority.

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A fee is payable at Mortgage application, this is a lifetime fee which entitles you to advice over the lifetime of your mortgage at no further cost.  

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Boulter Mortgages may receive financial compensation when referring clients to other service providers, including but not limited to Conveyancers, Surveyors and Will Writing Services. When this relates to you as a client of Boulter Mortgages, details of the amount received can be provided to you upon your request

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