21st May 2025 11:50
(Alliance News) - Mortgage Advice Bureau Holdings PLC on Wednesday said increased mortgage activity has continued into 2025, with the cost of borrowing and mortgage rates lower amid reduced interest rates.
The Derby, England-based mortgage broker is holding its annual general meeting on Wednesday.
Mortgage Advice said mortgage completions were "particularly strong" in the first quarter of the year, as customers aimed to complete property transactions ahead of changes to stamp duty land tax relief, which went into effect in April.
That month, the purchase price threshold at which first-time buyers in England and Northern Ireland pay stamp duty on property fell to GBP300,000 from GBP425,000.
Chair Mike Jones said: "Purchase activity remains stronger year on year, underpinned by improving buyer affordability and an increased supply of new properties coming onto the market. If mortgage rates remain stable or decline further, we expect purchase activity in 2025 to continue to outperform 2024."
Further, he said: "We welcome the government's growth agenda, including efforts to accelerate new housing development in the UK, and support the Financial Conduct Authority's initiatives to promote responsible lending - particularly regarding mortgage affordability stress testing and the consultation to simplify mortgage rules - both of which should help more renters become first-time buyers and support sustainable growth."
Jones said that for this year he expected "further cuts to the Bank of England's base rate".
However, data published by the Office for National Statistics on Wednesday showed that UK consumer price index inflation accelerated to 3.5% on-year in April from 2.6% in March, overshooting expectations of a rise to 3.3%. The Bank of England's target inflation rate is 2.0%.
On May 8, the bank had reduced its interest rate by 25 basis points to 4.25%. It had been as high as 5.25% between August 2023 and July 2024.
The Bank of England has been cutting interest rates too quickly, its chief economist warned Tuesday.
Huw Pill said the pace of interest rate reductions since August last year has been "too rapid" given the balance of risks to UK inflation.
Ebury analyst Matthew Ryan commented: "Today's data should put pay to the possibility of another UK rate cut for a few months, and will likely encourage the Bank of England to maintain its hawkish policy guidance for some time yet."
Mortgage Advice shares were 0.1% higher at 822.43 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News slot editor
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