BSA comments on the MPC's decision to keep the Bank Rate at 5.25%
Commenting on the MPC’s decision not to change the Bank Rate from 5.25%, Paul Broadhead, Head of Mortgage and Housing Policy at the BSA said:
“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.”
- Ends -
Contacts:
Katie.wise@bsa.org.uk / 020 7520 5904
Debbie.enever@bsa.org.uk / 020 7520 5926
Notes
- The results of the latest BSA’s Property Tracker survey were published on 7 December and fieldwork was undertaken between 1-4 December 2023
- The Building Societies Association (BSA) represents all 42 building societies, as well as 7 of the larger credit unions. Building societies serve around 26 million consumers across the UK and have total assets of over £507 billion. Together with their subsidiaries, they have helped over 3.5 million families and individuals to buy a home with mortgages totalling over £375 billion, representing 23% of total mortgage balances outstanding in the UK. They are also helping over 23 million people build their financial resilience, holding over £370 billion of retail savings, accounting for 19% of all cash savings in the UK. Within this, societies account for 40% of all cash ISA balances
- With all of their headquarters outside London, building societies employ around 51,500 full and part-time staff. In addition to digital services they operate through approximately 1,300 branches, holding a 38% share of branches across the UK.
