For aspiring housebuyers seeking mortgages in Liverpool, property has historically been more affordable than in many other parts of the UK. At the same time, however, buyers in the city have shared with buyers across Britain in the same low interest rate environment since 2009.
This year has seen the situation change significantly. At 2.25 per cent, the base rate is still below par by historical standards, but a succession of base rate increases in response to rising inflation and the expectation of more to come will have left many wondering what sort of mortgage deals they can get in the current climate.
The situation was made worse by the way the money markets reacted to the tax-slashing mini-Budget of September 23rd, which prompted many lenders to put mortgage rates up and others to withdraw products.
As we now know, this turmoil led to the new economic strategy of prime minister Liz Truss and her chancellor Kwasi Kwarteng unravelling rapidly, with both of them soon leaving their jobs.
Now Rishi Sunak is in Number 10, it appears the markets are rather calmer, expecting the public finances to be on a firmer footing and not fearing any radical new economic experiments, although business leaders have called for clear action to ensure economic stability.
With the fiscal statement by Mr Kwarteng’s successor as chancellor Jeremy Hunt delayed from October 31st to mid-November, there will still be some uncertainty. Indeed, this does mean the statement will come after the Bank of England’s next interest rate decision on November 3rd.
That does not mean the Bank’s Monetary Policy Committee is entirely flying blind, as they have been given a general steer by Mr Hunt on the direction of policy and will have lots of other factors to consider.
While more rate rises are expected, they may at least be less than the markets expect, according to recent comments made by the Bank’s deputy chief Ben Broadbent, who observed that prices may be starting to stabilise.