Let’s be honest, I am sure no-one expected to see that the Bank of England Monetary Policy Committee, (MPC), had suddenly raised rates from their current 0.5% level, although some commentators have been a little jittery with inflation nudging 3%.
What is more interesting is that not only have the MPC decided to take a pause in their campaign of Quantitative Easing, £200 billion seems to have been enough of a spending spree for now at least, but you could argue that Bank Base has now entered a new phase – I call it “the expectation phase”. This is where many people expect a change but are not quite sure when and it is this expectation that can be a driver for all manner of decisions.
I was up before the crack of dawn yesterday morning, 4.15 am to be precise, for a stint on BBC Radio 5 Live’s’ “Wake Up To Money” followed by BBC Breakfast TV chatting about mortgage rates after one too many cups of strong coffee. We were talking about the different predictions around Bank Base Rate and what the hell the general public make of it all when it comes to making their own decisions with regards to their own mortgage.
Can anyone tell me where 2009 has gone? In fact, actually don’t bother as I suspect that like many we will be glad to see the back of another tumultuous year which has seen many dramatic changes.
The positive news is that 2010 looks like it will be a good year, in fact, I am sure of it.
There are many opportunities for all of us as things slowly begin to improve, and whilst I am under no illusions that it will be hard work, the positives are clearly there.
We all know of course that there was never going to be any changes this month in the Bank of England Base Rate, nor in the amount Quantitative Easing, but there are still some interesting forces at play.
There are still some who believe there should be a further cut next year with a further increase in Q.E., whilst others believe that inflationary pressures, especially in commodity prices amongst other things, may mean that we soon see inflation rising faster than expected, which in turn raises the spectre of increased rates quicker than expected! It remains to be seen which group will be shouting “house” first.
Amongst all the conflicting news and views around at the moment, there seems to be a strong level of consistency where the large loan mortgage and property market is concerned. At the £500,000 plus level for mortgages and the £1m plus level for property, activity has been relatively strong for a while now.
It has always been the case that the top end of the market seems to move six to nine months before the rest of the market, so the question is how long it will take this time before the activity begins to trickle down to the rest of the market.
Andrew Montlake, Communications Director at Coreco and ‘Mortgage Personality of the Year 2008’, gives his views — honest and no holds barred — on the latest developments within the mortgage and property markets.
