2024-08-02 06:13:09
BBC‘Double whammy’
Interest rates determine the borrowing costs that commercial banks and lenders set for loans such as mortgages and credit cards.
Peter Seymour, of the Mortgage Shop, a Jersey mortgage broker, described the Bank of England’s decision as “great news for everyone”.
“I do think it will have a significant impact on the housing market,” he said.
“We’ve been communicating with lenders over the last few days and they will move very quickly — in other words, probably within a few days to a week — to start reviewing and reducing rates.
“And then once they all decide to lower their rates, I think they’ll all start to look and think about what rates their competitors are offering and then start to offer more competitive rates – so it’ll be a double whammy and good news for borrowers.”
Andre Austin of Swoffers estate agents in Guernsey also saw the rate cut as “positive” but said he and his colleagues were “very, very busy” again after a “tough” period with rates rising in 2023.
“People are clearly looking for the best mortgage deal they can get,” he said.
“It (falling interest rates) changes affordability. Hopefully it will also make homes more affordable for more people.”
But he added: “I don’t think we’re going to see a rush of people buying a lot of properties just because interest rates have fallen.”
Bank of England The goal is to maintain inflation at 2%.The central bank raised interest rates to 5.25% in a bid to slow price increases, even though inflation is running well above that level.
Inflation has now started to decline, although Jersey and Guernsey Still higher than the UK.
In addition to rising inflation, a report by the Jersey Consumer Council (JCC) earlier this year found Jersey lenders offer mortgage rates around 1% higher Higher than the rate offered by the same bank in the UK.
Against this backdrop, Consumer Council chairman Carl Walker hopes this week’s rate cut represents a turning point.
“Lower interest rates are not only good for those looking to buy a home, but it also suggests inflation is now starting to slow,” he said.
“In the long run, it may make things easier for consumers.”
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