20th Jul 2023|News|Sales|Lettings|New Homes|

Inflation Has Dropped… What Does This Mean For Mortgage Rates?

On Wednesday 19th July, it was revealed that inflation was finally going in the right direction – down. In fact, inflation has fallen to its lowest in over a year, with the Office for National Statistics reporting that inflation for June sits at 7.9%. Although still higher than any will be used to, inflation is starting to come down quicker than anticipated, with most predictions suggesting that it would only decrease moderately by July to 8.2%.

However, it is anticipated that the Bank of England will unveil yet another rise in interest rates in the coming days and weeks. The predicted rise will be the 14th consecutive hike in interest rates, aimed at reducing consumer’s expenditure and bringing down inflation. As difficult as interest rate rises are – especially for those with mortgages – the government remain adamant that they are the best way to bring inflation back towards more desirable levels. As such, it is predicted that the Bank of England’s next interest rate hike will be of 0.25% as opposed to the typical 0.5%.

Inflation And Mortgage Rates

But what does this all mean for the property market?

Firstly, the reduction in inflation offers significant hope for renters and buyers alike. Markets have reacted to the news of lowering inflation positively, which could see mortgage rates drop in the near future. This will have a huge impact on the property sector. It will make mortgages more affordable to searching buyers and could bring existing homeowner’s repayments down. This will undoubtedly be a huge relief for the 1.4 million households that are coming off their fixed mortgages this year.

The Times are already predicting that mortgage rates could come down within the next few weeks. So, if you’re in the market to move, sell or buy a new home in the near future, now could be an optimal time to be seriously exploring your options in this increasingly favourable market.

Buy to let landlords with interest-only mortgages will also see their mortgage costs reduced should rates reduce and many landlords may pass these savings across to their tenants by delaying rent increases. This, in turn, puts more money in people’s pockets across all sectors.

Andy Butts, Group Sales & Lettings Director, told us:

“This drop in inflation will be received well across the property market and may see more buyers, including first time buyers, join the market should mortgage rates be decreased and encourage sellers to act more swiftly to avoid missing the opportunity”.   

The ups and downs of the mortgage market and the economy make it difficult to stay up to date. That’s why we strongly recommend discussing your financial plans with an advisor who can help you make sense of your money and plan for your next property move. To talk to us about valuing your property for sale or rental get in touch today – our expert, experienced and friendly team are here to help.  At Centrick, we work closely with the team at ME Financial, who have provided our clients with balanced, informed and helpful advice when it comes to making their all-important property decisions. 


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From tips on obtaining your first mortgage, to the newest mortgage options available, Centrick are always searching for the most important  news, tips and insights to make your property journey a breeze. If the recent news of dipping inflation has encouraged you to reignite your search for your next home or investment opportunity, contact Centrick using the form below. We’d love to help!

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