In 2024, mortgage rates are anticipated to decrease as lenders look to capitalize on less expensive funding, according to Greycoat real estate agency specialists. They explain that this happens as data shows that average swap rates have declined for five consecutive months.

 

To forecast potential market reactions to this week’s Bank of England base rate announcement, Octane Capital examined average monthly swap rates over the previous 12 months. According to Greycoat real estate, it is anticipated that the Bank of England will maintain the base rate at 5.25% today. 

 

The base rate was last adjusted in August, when it was hiked by 0.25%, Greycoat shares. However, since then, swap rates have begun to decline due to increasing market stability. Since then, CPI inflation has decreased from 6.3% in September to 4.7% in October, indicating that we are finally approaching the Bank’s 2% target inflation rate.

 

Even before the Bank officially decides to decrease the base rate, swap rate activity indicates that the markets believe it is more likely that the Bank of England would choose to reduce the base rate rather than choose to hike it again. According to Greycoat, this should translate into lower mortgage rates in the upcoming year.

 

“Falling inflation means the Bank of England’s strategy over the past two years appears to be working,” said Jonathan Samuels, CEO of Octane Capital, “even though the reduction in overall inflation has been mainly caused by energy and food price drops.”