The Bank of England has left the base rate unchanged at 5.25%, disappointing homeowners hoping for relief on mortgage payments. Governor Andrew Bailey expressed optimism that “things are moving in the right direction,” but experts say the decision is a setback for borrowers.
According to UK Finance, around 1.6 million fixed-rate mortgages are due to end or have already ended in 2024, meaning many homeowners will remortgage onto significantly higher rates. Kate Steere, housing expert at finder.com, said the hold “will no doubt be a huge blow to borrowers who were hoping for some relief.”
Average mortgage rates have edged up slightly, with the average two-year fix at 5.93% and five-year fix at 5.51%, up from 5.91% and 5.49% a week ago. Paul Broadhead of the BSA noted that rates remain lower than a year ago but warned those coming off fixed deals should prepare for higher payments.
Some commentators expect rates to fall later this year. Andrew Montlake of Coreo Mortgage Brokers said a summer cut would improve housing market sentiment. Matt Smith of Rightmove predicted average rates will “trickle down again soon,” with all eyes on April’s inflation data.
UK Finance data also showed 870 homeowner-mortgaged properties were repossessed in Q1 2024, up 36% from the previous quarter. However, repossession numbers remain low historically. Jeremy Leaf, a north London estate agent, noted borrowers are increasingly concerned about the uptick in rates and delay in expected cuts.
