Octane Capital forecasts rate reductions

August 2, 2024 by Brendan O'Neill

Rates

Property finance company Octane Capital is predicting that there will be a drop in the rates set by mortgage lenders before too long, based on figures showing a fall in average swap rates.

The company took a look at average swap rates for both 30-day and 60-day periods in conducting its research. It discovered that the previous 30 days had seen them fall by an average of -0.22% each day. On the other hand, the 30 before that had brought average swap rate rises of 0.06% on a daily basis.

When looked at over a 60-day period, there has been a daily average drop in swap rates of -0.08%. Again, the 60 days prior to that had brought average daily rises of 0.13%.

The switch from rising to falling rates, combined with inflation levels being back under control, has led the company to predict interest rate cuts at the start of next month. That is when the Monetary Policy Committee for the Bank of England next meets.

The chief executive of Octane Capital, Jonathan Samuels, told Mortgage Finance Gazette that August could well bring a reduction in interest rates among lenders due to these factors. He then added:

“This will be welcome news for mortgage holders who have seen the cost of their repayments climb considerably in recent times, and so too for prospective buyers who have had to re-evaluate their position in the market due to increased borrowing costs.”

Those within the industry who have the CeMAP mortgage advisor qualification would welcome this development, as it would likely help to bring in more business.