Mortgage Market Update: Election Uncertainty and Rate Cuts on the Horizon

As the UK gears up for a general election on July 4, the mortgage market is bracing itself for a period of uncertainty. The fate of the Leasehold and Freehold Reform Bill and Renters (Reform) Bill hangs in the balance, leaving landlords, property managers, and tenants seeking improved security and standards in limbo.

Election uncertainty looms over the mortgage market

The International Monetary Fund (IMF) has recommended that the Bank of England cut interest rates by up to 0.75% in 2024 to support the economy’s gradual recovery from a mild recession. This move could have significant implications for mortgage holders and the wider housing market.

Interest rates could be cut to support economic recovery

In other news, Chetwood Financial has acquired buy-to-let lender CHL Mortgages for Intermediaries, which will operate alongside its forthcoming BTL business, ModaMortgages. This acquisition is set to expand Chetwood’s mortgage loan book and broaden its presence in the mortgage intermediary market.

Mergers and acquisitions shape the mortgage market

The Bank of England’s deputy governor, Ben Broadbent, has hinted that interest rate cuts could be possible over the summer if inflation continues to decline. However, he emphasized the importance of assessing whether the lingering effects of the pandemic and Russia’s conflict in Ukraine on inflation will persist longer than initially thought.

Inflation slows, but uncertainty remains

The Office for National Statistics has reported that inflation slowed to 2.3% in April, driven primarily by the decline in gas and electricity prices. While this figure is closer to the Bank of England’s 2% inflation target, it remains at the higher end of forecasts.

Inflation rates slow, but remain above target

HSBC has expanded its international buy-to-let mortgage services to UK brokers, marking the first time it has done so. The coverage spans 14 countries and regions, including Australia, Hong Kong, Singapore, Switzerland, UAE, USA, Guernsey, Isle of Man, and Jersey.

HSBC expands international mortgage services

The mortgage industry came together to celebrate the Mortgage Strategy Awards 2024, with TV and radio presenter Colin Murray hosting the event. The judges had a challenging job choosing the winners, with many highly commended firms highlighted.

Mortgage industry celebrates at Mortgage Strategy Awards 2024

As the election campaign gets underway, the property industry hopes that the general election will prioritize calls for more housebuilding and stronger landlord protections. However, the sector may experience slower mortgage lending as its first impact.

Election campaign may lead to slower lending

The Financial Conduct Authority (FCA) has outlined its agenda for the remainder of the year and beyond, with the goal of making the UK the best place in the world to do business.

FCA outlines agenda for the year

Halifax has announced that it will be reducing rates on home mover and first-time buyer products by up to 19 basis points.

Mortgage rates set to fall

As the mortgage market navigates this period of uncertainty, one thing is clear: the coming months will be crucial in shaping the future of the industry.