Mortgage Rates Continue to Fall as Lenders Cut Prices
The mortgage price war is raging on, with multiple lenders cutting rates in recent weeks. Santander and TSB are among the latest to join the trend, reducing fixed rates by up to 0.14 percentage points and 0.2 percentage points, respectively. Virgin Money and Clydesdale Bank have also slashed their standard variable rates by 0.25 points, and Virgin has launched limited-edition special rates that will be available until Monday 22 July.
Mortgage rates are slowly falling across the board.
Experts expect that rates may continue to fall, with brokers predicting rates of below 4 per cent for those with the biggest deposits or equity could be a possibility within weeks. Aaron Strutt of Trinity Financial said: “More lenders are lowering their rates at the moment to undercut their competitors. This is good news for borrowers planning to get on the property ladder soon or remortgaging homeowners keen to minimising the payment shock.”
However, the speed of rate cuts could depend on whether inflation falls as expected on Wednesday. Elliott Culley of Switch Mortgage Finance toldi: “If inflation data was better than expected this could accelerate rate drops and cement a Bank of England base rate reduction in August.”
Despite the uncertainty, some experts believe the base rate decision is having little impact on whether lenders are deciding to cut rates. Jane King, a mortgage broker at Ash Ridge, said: “Although bank rates have stayed the same for several months, fixed rates have been fluctuating up and down for some time – this is partly due to a lack of new business which is forcing them to become more competitive.”
Investment Trusts Remain Popular
Meanwhile, UK investors continue to be drawn to growth-focused investment trusts like Scottish Mortgage as the public bets that a comeback for growth companies is on the horizon. Retail investors hold about 23 per cent of the shares in investment trusts, data from the Association of Investment Companies revealed earlier this year.
Investment trusts continue to be popular among retail investors.
Construction Growth Boosted by Major Projects
Major projects have boosted UK construction growth, according to Glenigan’s latest report. Construction start performance during the second quarter of this year increased 13% compared to 2023, with a substantial uptick in major projects.
Construction growth is on the up, thanks to major projects.
The sector-specific and regional index saw starts softening across the board. However, the North East was the strongest-performing region in the UK, with project-starts increasing 56% against the preceding quarter, to stand 8% up on this time last year.
Glenigan’s Allan Wilen said: “The downward trend in approvals could signal a potential stalling in construction activity, to be expected due to the impact of the recent General Election and the usual summer slowdown.”
“However, I’d expect a gradual easing in interest rates over H2 2024 and greater stability as the new Government settles in, to create renewed industry confidence and an upturn in demand; good news for the industry.”
“Furthermore, the Chancellor’s commitment to reform the NPPF should create opportunities for housebuilders over the rest of the year and into H1 2025.”
Annuity Incomes Soar
Rising interest rates have caused annuity incomes to soar, but is now the right time to get an annuity? With rates slowly falling across the board, it may be worth considering fixed-rate mortgages or investment trusts as an alternative.
Annuity incomes are on the rise, but is now the right time to get one?
