Base rate likely to remain low
This week’s decision by the Bank of England’s Monetary Committee to keep the base rate on hold at 0.5 per cent for the 18th month running was widely expected by most commentators.
“Although a few voices are raising some concerns about inflationary risks, I do not expect the base rate to rise until the second quarter of next year, given the ongoing concerns about the economy,” says Simon Gammon, head of Knight Frank Finance, which specialises in mortgages over £1m. “Even then any increases will be gradual.”
He adds: “It could, however, make sense to take advantage of the current opportunity to fix rates at favourable long-term rates before they increase. Fiveyear fixes are available at under four per cent and so if you can afford it, you should consider fixing some or all of your mortgage at this rate.”