Base rate held as property sales pick up

The Bank of England Base Rate, January 2020: 0.75%

It’s no surprise the Bank of England has held the rate at 0.75%, rather than a much mooted rate cut, considering the uncertainty that remains over the UK’s future relationship with the EU.

A rate cut would have shown a lack of confidence in the economy, when many short term indicators are positive. This month, the Purchasing Managers’ Index (PMI) hit a 16-month high, and a Deloitte survey measuring optimism among business leaders reached its highest level in more than a decade.

The property market in particular has been boosted by the certainty provided by December’s election result. In the ten days following the vote, Knight Frank transacted more exchanges in central London than any equivalent period since December 2016.

We’ve also seen an increased appetite to do deals from the banks, with new targets set at the beginning of the year and a rate war underway among the high street lenders.

As a result, now is an opportune moment to assess your finances.

If you would like to review your borrowing options or have any questions about the mortgage market, please get in touch.