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Boulger backs trackers with rates set to ease

The Bank of England base rate has peaked, says Charcol senior technical manager Ray Boulger.

Boulger says the monetary policy committee’s decision last week to keep the base rate at 4.75 per cent is unsurprising and he believes that rates have now peaked.

He predicts that rates could start to fall earlier than previously anticipated, possibly even as early as the first half of next year.

Boulger says tracker mortgages are still the best bet for homeowners as there is an increasing expectation that rates may soon ease back.

He does not think that long-term fixed-rate mortgages are the right way as they lock homeowners into a deal that could be costly over the lifetime of the mortgage. He advises borrowers not to go for loans above three years.

Boulger says: “The City would have been staggered if today’s decision was anything but a freeze. All the statistics and surveys released over the last month have pointed to more bearish conditions, which indicate that the previous rate rises have now seeped into the market. This appears to have had the desired effect of slowing the housing market without causing the crash landing some people were fearful of. We are inclined to believe that rates have now peaked.”

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