First fall for fixes since May following inflation data: Moneyfacts   

By: ameer@trustedteam.com

Two- and five-year residential rates fell for the first time since May following yesterday’s better-than-expected inflation report.  

The average two-year fixed-rate residential mortgage rate fell by 2 basis points to 6.79% from Wednesday, according to data group Moneyfacts.  

While the average five-year fixed-rate residential mortgage rate is also 2bps lower at 6.31% from yesterday.  

The number of residential home loan products on the market jumped by 179 to 4,495 from a day ago.  

The moves follow inflation falling to a sixteen-month low of 7.9% in the year to June, according to the Office for National Statistics, from 8.7% in the year to May.  

Financial markets are betting that this ease in the rise of the cost of living will reduce pressure on the Bank of England to aggressively lift the base rate, currently at 5%.

Investors forecast a peak base rate of 5.75%, compared to predictions earlier in the week of the rate hitting 6.5% next March.  

However, inflation remains almost four times higher than the BoE’s 2% target.  

Buy-to-let rates were mixed. The average two-year BTL rate today is 6.94% today, unchanged from the previous working day.  

While the average five-year BTL rate edged higher by a single basis point to 6.77% from Wednesday.  

The number of landlord loans products on the market rose by 14 to 2,393 from a day ago.  

Related post