Increased Expectations of Interest Rate Cuts Lead to Further Decline in Mortgage Rates
Amid recent trade turmoil, investors are betting on the Bank of England cutting interest rates by 85 basis points this year, with a near certainty of at least a 25-basis-point cut at the next meeting on May 8th. There's also a roughly 10% chance of a more significant 50-basis-point cut.
As expectations for a Bank of England interest rate cut grow, more and more UK lenders are lowering mortgage rates.
Starting this Wednesday, Coventry Building Society, one of the UK's largest mortgage providers, has reduced the rate on its two-year fixed-rate mortgage to 3.89%, valid until the end of October 2027.
Meanwhile, Co-operative Bank has lowered rates on some of its two-, three-, and five-year fixed-rate mortgages by 0.14 percentage points starting Thursday. TSB, Metro Bank, and Bank of Ireland have also cut rates since the beginning of the week.
Additionally, Barclays has announced a reduction in rates on some of its mortgages to below 4%.
Many industry insiders expect rates to fall further in the coming days, as major banks like HSBC and Santander continue to adopt a "wait-and-see" approach and have yet to announce rate cuts. When they do, other lenders often follow suit.
Furthermore, according to the latest data from Moneyfacts, as of April 9th, the average rate for a two-year fixed-rate mortgage has slightly declined to 5.3%, and the average rate for a five-year fixed-rate mortgage has also slightly decreased to 5.15%.
Analysts attribute this decline in loan rates to financial market and economist expectations of interest rate cuts, with the market believing the Bank of England will lower borrowing costs more than expected this year to avoid a recession. Currently, economists generally expect the Bank of England to cut interest rates four times in the next 12 months, up from just two expectations earlier this week.
Home Office's Proposed Restrictions on PSW Visas Face Opposition from the Education Sector
The Home Office's proposed reforms to the Graduate (PSW) Visa have faced opposition, with the UK education sector opposing plans to limit the number of overseas students allowed to stay in the UK.
As is well known, the Graduate Visa allows overseas students to stay in the UK for up to two years after completing their university degree, even without a job. After two years, these students must find a job that meets graduate-level standards to continue staying in the UK.
Home Office officials cite previous government advisor estimates that graduates should earn an annual salary higher than £30,000. However, a study by the government's Migration Advisory Committee last year found that over 60% of PSW visa holders still earned less than £30,000 twelve months after the program's implementation.
UK Prime Minister Starmer is expected to release a white paper next month outlining the government's plan to reduce net migration in the UK, with reforms to the PSW visa route being a key component.
Official Announcement: Universal Studios to Settle in Bedford, UK
Recently, the UK government officially announced that the Universal Studios theme park and resort project will launch in Bedford, with an investment of several billion pounds.
The Universal Studios project is expected to bring up to £50 billion in economic benefits to the UK over the next 20 years and provide approximately 28,000 jobs locally. According to the current plan, the UK Universal Studios will cover 476 acres and become one of Europe's largest and most advanced theme parks and resorts upon opening in 2031.
The UK government describes this investment as "a significant vote of confidence in the UK economy and the future UK-US partnership." Currently, there are five Universal Studios theme parks worldwide, located in Hollywood, USA; Orlando, Florida, USA; Beijing, China; Osaka, Japan; and Singapore.
Soaring Rental Demand in the UK
The Royal Institution of Chartered Surveyors (RICS) reports a significant increase in tenant demand in the UK, while the number of landlords providing housing has decreased.
In RICS' March UK Residential Property Survey, it states: "This imbalance leads us to predict that rents will rise in the next three months, while also increasing pressure on renters who may struggle to find suitable rental properties."
Tom Bill, Head of UK Residential Research at Knight Frank, commenting on the RICS report, said: "The Tenant Rights Act seems like bad news for renters due to reduced supply and increased rental pressure. Protecting renters is a positive goal, but if landlords perceive regulations as too strict and reduce investment, then protecting renters is not a positive goal."
He added: "For landlords still in the industry, the good news is that as rents rise, yields are also increasing."
Liverpool Street Station to Undergo Multi-Million-Pound Upgrade
Recent media reports indicate that Network Rail will spend several million pounds upgrading Liverpool Street Station, the UK's busiest station.
Currently, Liverpool Street Station handles over 118 million passengers annually. After the upgrade, more routes will pass through the station, potentially increasing annual passenger traffic to over 200 million. As part of the upgrade, the station entrance will be redesigned, with enhanced landscaping and seating areas in the station square. The waiting hall will also be expanded, with additional family activity areas and quiet waiting zones.
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