Could there be a budget sweetener on the horizon with a cut in rates at Christmas?

The bank base rate remains at 4% for now but could there be a budget sweetener on the horizon asks Enzo Mora CEO and founder of The Mortgage Brain.

While the Bank of England has held interest rates this month, the panel narrowly voted 5-4 in favour of no change, the Governor Andrew Bailey hinted that rates are on a gradual downward path if inflation has reached its peak and labour costs stabilise, which means we could see a cut before Christmas. With the B word on most people lips, a base rate cut following the Budget at the end of this month, could be a sweetener to any of the rumoured tax rises. It would certainly give a pre-Christmas boost to the property market which has been on a go slow since the end of summer as talk of capital gains rises and possible changes to stamp duty has affected confidence.

Good news, mortgages are getting cheaper

Perhaps in anticipation of a rate cut, a few lenders have cut rates in recent days and we’re hoping this trend will continue. Our relationships with lenders across the board means that we can access the most favourable rates for our customers, so it’s always worth checking out our Mortgage Finder which will take you through to a chat with one of our expert advisers. If you’re thinking of buying a brand new home, we work with over 20 national house builders to provide mortgages exclusively to their buyers. Schemes like Nationwide’s Helping Hand mortgage, allowing first-time buyers to borrow up to 6 times income at 95% loan to value, saw completions on new build properties rise by 102% in the last year. We understand the new build process from reservation through to completion so look out for our helpful advisers onsite. Our top tip is to keep your eyes peeled for any pre-Christmas incentives to reserve which could save you a few pounds.

Lofty improvements add value

Many of our customers remortgage so they can make home improvements as they need more space or want to upgrade a kitchen or bathroom – the most popular renovations according to research by Nationwide. However, adding space to create an additional double bedroom can 13% to the value of an existing two-bedroom house. Homeowners who add a loft conversion or extension, incorporating a large double bedroom and bathroom, can add as much as 24% to the value of a three-bedroom, one-bathroom house. The analysis showed that a 10% increase in floor space could add 5% to the price of typical home. Providing more room that is useable is a good way to increase the value of a property and the rise in hybrid working means that some of these spare bedrooms are now more likely to be used as a home office or study.

Let’s learn about mortgages

I was pleased to hear that children will be taught about mortgages at school. Understanding the types of mortgages you can get, how long you can borrow the money for and how the interest is worked out is vital if you want to buy a property at some point. Lloyds Bank surveyed 2,000 first time buyers and found that just 13% said they fully understood the homebuying process and 22% were uncertain about how to go about getting a mortgage. However, nearly two-thirds (65%) plan to speak to a lender or mortgage broker to help guide them through the process, which is good news for The Mortgage Brain! Always at your service wherever you are on the ladder.