Following the news that UK inflation fell to 2.8% in April, mortgage and property industry leaders have shared their reaction to what could be a significant moment for borrowers, brokers and the wider housing market. While the drop may ease pressure on the Bank of England ahead of its next base rate decision, experts warn that ongoing geopolitical instability, affordability challenges and consumer uncertainty continue to shape market conditions.
Ben Allkins, head of mortgages and protection at Just Mortgages, said:
“Inflation easing in April certainly feels counterintuitive and is likely explained in part by the lowering of the energy price cap. I think if you speak to people in the supermarket or at the petrol pump, they’re certainly not feeling it as the Iran conflict continues to put pressure on global supply and drive up prices. The impact on mortgage rates and broker workloads is well-documented too.
That pressure is still likely to be the norm moving forward, particularly with no resolution to the conflict in sight. Attention will soon turn to the next base rate decision in a few weeks’ time, with opinion still split on the outcome. Could a drop in inflation be enough to stave off any potential hikes for a little longer, particularly with the unexpected jump in unemployment announced this week.
Across the employed and self-employed parts of our business, we have seen clients getting on with the task at hand, which in many cases has meant pushing on with their remortgage. We are still seeing purchase activity, although it continues to lean more towards those needing to move, rather than wanting to.
In both cases, it is an important reminder of why brokers are so important and the vital role we play in helping borrowers navigate the market. The priority right now is making sure we are being proactive, maintaining that five-star service and covering all our bases to ensure clients are properly supported.”
Richard Pike, sales and marketing director at Phoebus Software comments:
“The surprise fall in inflation to 2.8% is good news for the economy and for consumers but is unlikely to be the start of a sustained fall and underlines just how unpredictable the current environment is. Inflation remains stubbornly high, with upward pressure from fuel and transport costs linked to the ongoing instability in the Middle East.
At the same time, the labour market remains weak, and yesterday’s unemployment and wage data will make the Bank of England think very carefully about how far it can go in tightening policy without risking a deeper slowdown.”
Ben Thompson, Director of Home Moving Strategy, Mortgage Advice Bureau:
“Whether you’re looking to buy your first home, move up the ladder, or remortgage, a drop in inflationto 2.8% is certainly the news borrowers were hoping for. As inflation begins to ease, we could also see mortgage rates follow suit, helping to relieve some of the ongoing pressure on affordability and consumer confidence.
Our research shows 41% of prospective buyers are currently waiting for a ‘sign’ before making their next move, highlighting how closely housing sentiment is linked to the wider economic picture.
At the same time, uncertainty isn’t being driven by affordability alone. Nearly a third of prospective buyers admit they don’t fully understand the homebuying process, while 73% are unaware of high loan-to-value mortgage options that could help make homeownership more accessible.
That’s why getting expert mortgage advice is more important than ever. In a market shaped by economic uncertainty and changing rate expectations, advisers play a crucial role in helping buyers understand the options available to them and make informed decisions with confidence.”
