The BSA comments on the Bank of England maintaining interest rate

The Building Societies Association (BSA) comments on the Bank of England’s decision to maintain the base interest rate at 5%.

Paul Broadhead, Head of Mortgage and Housing Policy at the BSA said:

“Following the cut in the Bank Rate last month, almost half of UK adults (44%) thought that based on the current economic conditions the Monetary Policy Committee should have reduced the Rate again today.  

“The cut in the Bank Rate last month marked a significant turning point in what had been a difficult two-and-a-half years.

“However, in reality shaving just 0.25 percentage points of the Bank Rate has not made a significant impact on mortgage affordability or confidence in the housing market, despite markets pricing it into mortgage rates.

“First-time buyers, who are critical for a properly functioning housing market, are still indicating that they are unable to afford homeownership.

“The Building Societies Association’s latest Property Tracker Report issued today shows that the affordability of monthly mortgage payments continues to be the biggest barrier to buying a home, with almost two-thirds (61%) citing this.

“Over half (55%) said raising a deposit is an obstacle to them being able to take a step on the property ladder.

“We still expect the Bank Rate will reduce this year; however, this is happening much later and slower than we had anticipated earlier in the year. 

“Anyone who is concerned that they may experience financial difficulties in the coming months, should contact their lender as soon as possible, preferably before missing any payments.

“Lenders have a range of practical, tailored support available to anyone who may be struggling.”

Kindly shared by The Building Societies Association (BSA)