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Is there light at the end of the inflation tunnel? Mortgage and Property experts react to news UK inflation has fallen sharply

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The ONS has announced this morning that for the year to October, UK inflation has fallen to its lowest levels for two years – at 4.6% – even lower than experts were anticipating.

Largely driven by a fall in energy costs, compared to last month’s inflation rate of 6.7% this reinforces the view that the direction of travel for inflation is continuing downwards. But prices are still rising after all – albeit at a lower rate. So, what does today’s positive news actually mean for consumers, for interest rates and for mortgage and property professionals?

Mortgage and Property experts have been sharing their reaction to today’s inflation data with us as follows:

Simon Redler, director at Prudell Financial Services said: “The reduction in inflation is clearly welcome news and is the first green shoot that the housing market was looking for. Fixed rate mortgages have just started to become available at sub 5.00% and this is likely to be the start of a healthy and competitive mortgage market. We expect 2024 to be a good year for the UK mortgage market.”


David Tyler, specialist finance and mortgage broker at JFS Finance said: “Impact will be minimal short-term as inflation was always due to fall last month and next due to increases in fuel etc 12 months ago.  The markets were fully aware.

“However, it does provide confirmation of anticipated reductions so less pressure on BoE and hopefully slowly reducing rates with a tad more confidence will follow.  

“There is definitely a pent-up demand in the market and any signs of better news and stability will help the confidence return to buyers and lenders.”


Amanda De Courcy, Director, ADC Financial Limited said: “This is great news, predominantly down to the fall in energy costs. A much needed boost for us all. Already banks are starting to lower mortgage rates which should boost the sector and motivate UK PLC going forward. Now is probably not the best time to sign up for the 5-year fixed rate, and I think predictions are that the rates will fall, albeit not dramatically, into 2024. This good news should kick start our economy for the New Year which can only be a good thing!”

Robert Winfield, Managin Director at Chartwell Funding said: “Today’s inflation news was fantastic for the mortgage industry and a lot quicker than many of us thought. Whilst I am not predicting this is the start of an interest rate crash and house price increases, I am now more optimistic than ever that it would take another huge event to see interest rates rise.

“Please don’t judge my comments as negative as we have seen some unprecedented events of late in Ukraine and now Gaza which affected our markets and our cost of living. 


“2023 has been a really tough year for so many people and hopefully today marks a turning point where life becomes more affordable again. I for one am now really looking forward to 2024 and the opportunities it should bring!”

Tony Hall, Head of Business Development, Saffron for Intermediaries: “House prices are continuing to adjust in light of a challenging economic environment and higher interest rates, but the latest decision by the Bank of England to hold the base rate at 5.25% will bring stability to the market. As confidence starts to return to the sector, we are likely to see an uptick in demand and the value of housing stock bounce back.” 

“In what is still a challenging period for many mortgage holders, it is essential that advisers are on hand to assist borrowers. This latest correction in house prices will still come as a concern to homeowners looking to sell or remortgage, and many will be looking to their adviser for reassurance and support with finding the best possible deal. At Saffron for Intermediaries, we’re playing our part by reducing rates across our product range. As we see these changes come into effect, advisers will be even better positioned to help ease their clients’ remortgaging concerns.” 


Simon Webb, managing director of capital markets and finance at LiveMore, commented: “After two months of no movement in inflation, it is good to see the October figures showing a significant fall to 4.6%. Inflation is now well under half of what it was a year ago at its peak of 11.1% but it still has some way to go to reach the 2% target. 

“The drop in inflation was partly driven by a 7% reduction in the Ofgem price cap, compared to a 25% increase in October last year. Those high hikes in energy costs last year now fall out of the annual inflation figures. 

“Core inflation, which removes food and energy prices, was also down to 5.7% from 6.1%, and plays a key part in the Monetary Policy Committee’s interest rate decisions.


“This latest inflation data should be enough to keep base rate at 5.25% although there is still division in the MPC. The Bank of England’s chief economist Huw Pill recently suggested there was no need to increase base rate as inflation is steadily falling. However, governor Andrew Bailey believes it is too soon to say that rate rises have ended.”

Ben Waugh, Managing Director at more2life, said: “As the ongoing cost-of-living crisis squeezes consumers’ disposable incomes, it’s not too surprising that house price growth is slowing down in response to relaxed demand. Although the overall market is now trending towards a more regular groove, the data for September will not reflect the Bank of England’s decision to hold the base rate at 5.25%, so it may be a few months before we can tell whether these economic shifts are translating to increased competition in the property market.

“For older borrowers facing rising mortgage repayments ahead of retirement, this current phase of stability may provide a vital opportunity to assess their financial options. Times are challenging, especially for those who are on fixed incomes and are struggling to budget in the testing climate. For the over-55s, seeking expert independent advice from a professional adviser could provide access to a vast and comprehensive range of products, which may only be available through that adviser.”


Tony Silver, Director at White House Mortgages Limited said: “Although inflation has gone down to 4.6%, it’s still too early for the BOE to consider any interest rate reductions, however it may encourage the Chancellor to reduce both inheritance tax and Stamp Duty. If he reduces Stamp Duty, it would be better if this was a permanent reduction instead of a short term period as we’ve seen before. As I’ve said before, all eyes will be on the Autumn Statement. Over to you Mr Hunt…”

Mark Tender, Director at MAB Network Partner said: “Don’t expect any base rate reductions any time soon! – Therefore, borrowers on tracker mortgages or variable rate mortgages should either stick and hold (if comfortable and affordable) or if they want the security of knowing what they are paying they should look to fixed rates. 

“The reduction in inflation was widely expected and predicted by the Bank of England and the swap rate market has priced this in over the last few weeks, which has been reflected by falling short- and long-term rates (2, 5 and 10 year).


“What is most likely to effect rates in the short term are lender lending targets for the year and whether they have achieved what they require. – Many haven’t and we are seeing an aggressive pricing strategy from many on the high street to secure those deals towards the end of the year.”

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