BSA comments on the MPC’s decision to keep the Bank Rate at 5.25%

Paul Broadhead, Head of Mortgage and Housing Policy at the Building Societies Association (BSA), comments on the MPC’s decision to keep the Bank Rate at 5.25% (December 2023).

“Today’s decision to keep the Bank Rate at 5.25% was widely expected. 

“For many mortgage borrowers it might feel like we’ve finally turned a corner, with inflation reducing and new mortgage rates nudging down.

“However, whilst the Bank of England’s Financial Policy Committee recently reported fewer households with significant financial vulnerability, we’re not out of the woods yet.  

“Almost half (around 45%) of today’s fixed-rate mortgages are on rates agreed before the Bank Rate started to increase in December 2021.

“Borrowers on these mortgages will be coming off their fixed rates in the next three years, and should be preparing for a significant increase in their mortgage payments. 

“So, whilst it was reassuring that in this month’s Property Tracker report 85% of borrowers say they are confident that they can maintain their mortgage payments, lenders must still be alert to those families and individuals who may experience financial difficulties in the coming months.

“Practical, tailored support will continue to be offered to anyone who may be struggling. 

“For savers, there’s still a wide choice of accounts with attractive rates available.

“Shopping around can now make a sizeable, financial difference, particularly for those who are holding a large amount of savings in their current account.”

Kindly shared by Building Societies Association (BSA)