Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The fall in approvals for house purchases and for remortgages in August follows a sharper than anticipated dip in inflation in July, which fuelled hopes that the tide has well and truly turned on mortgage rates. Simply put, buyers and homeowners alike are happy to play the waiting game in the hope of getting a better deal. The recent decision by the Bank of England to keep its key interest rate on hold has further fuelled optimism over mortgage rates.
“Waning mortgage rates opens the door to home ownership for buyers who were shut out from the property market when rates surged to levels not seen since the financial crash. However, they remain significantly higher than levels of yesteryear. Rates need to fall even more, perhaps closer to 4%, to bring more confidence back to the market.”
Myron Jobson says: “The uptick in withdrawals from savings accounts in August is indicative of the fact that many households are still allocating a sizeable chunk of their income towards covering basics necessities – with the soaring cost of housing, be it mortgage repayments or rent, a particular pain point. This leaves them with less disposable income to save.
“The NS&I fared much better, with an extra £400 million flowing into its savings accounts. It shows that the UK government backed bank’s recent programme of rate hikes across its suite of saving products is paying dividends in a big way.”
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