It’s almost three weeks now since the general election and the first change in the UK Government for 14 years. We are repeatedly asked what this will mean for mortgages, and will it mean that there are rate changes coming?
The short answer is that, certainly in the short term, not a lot will change. The Government does not have a direct impact on mortgage rates, with the base rate of Interest being set by the Bank of England, which is independent of the Government.
We have seen fixed rate mortgages coming down a little more over the last few weeks, but this is more to do with competition between lenders than anything political. Inflation is down to 2% now, which meets the target the Bank of England work towards, so this is positive. However, the consensus right now, is that they will hold off dropping the base rate for a few more months, to make sure this is stabilised. The next rate announcement is due on 1st August, so we’ll see what happens there.
The new Labour Government did announce a new scheme in their manifesto to help first-time buyers. No specific details of this have been released, but it would appear to be something like the Mortgage Guarantee Scheme, which has allowed lenders to offer higher loan to value mortgages, therefore reducing the amount of deposit you need to buy.
As soon as we have any more news on this, we’ll let you know. They have also spoken extensively about increasing the number of building new homes, so this should certainly help with the supply of properties and potentially provide more affordable homes for first time buyers.
Overall, the outlook appears positive, but we’ll just have to wait and see.
Please get in touch with Barlow Irvin Financial Services award-winning team if you need expert advice.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.