Base rate held at 4.75%

Dec 19, 2024 | News, Property

Base rate is unchanged in December’s review, possibly due to inflation creeping up again in November.

The Bank of England has today voted to keep the base rate at 4.75%. While many might have hoped for another rate cut following November’s reduction from 5%, inflation figures released on 18 December may have influenced the decision.

UK inflation rose to 2.6% in November, up from 2.3% the previous month, according to the Office for National Statistics. This remains above the Bank of England’s 2% target. Core CPI inflation, which excludes energy, food, and alcohol, also increased to 3.5%.

Higher fuel costs and clothing prices, and increased demand for tickets to events have all contributed to this rise. However, the property market is expected to settle, and predictions show several base rate cuts may occur in 2025.

Despite inflation pressures, growth in the mortgage market is expected in 2025.

  • Gross mortgage lending is forecast to rise by 11% in 2025, reaching £260 billion.
  • Lending for house purchases is set to rise by 10%, with external remortgaging forecast to grow by 30%.
  • Nationwide predicts the housing market will gain momentum, particularly in the first quarter, thanks to changes in stamp duty, effective April 2025.

Whether you’re considering moving, getting onto the property ladder, or remortgaging, the market should be busier. We currently still have clients having offers accepted on properties in what would typically be a quiet time before Christmas.

While the market is facing challenges, the signs still point to a busy year ahead. If you’re planning your next steps, January might be the perfect time to act. There are predictions of a few base rate cuts next year.

As always, we’re here to help you every step of the way.