News & insights - Interest rates

The New Year has seen a sharp spike in UK borrowing costs, leaving many homeowners and buyers wondering what impact this will have on mortgage rates.

Inflation jumped to its highest level in eight months in the year to November, according to latest data from the Office for National Statistics (ONS).

As 2024 comes to a close, it’s an opportunity to reflect on the year in numbers – from our mortgage rates summary to how much our customers have saved with our Rate Check service.

The Bank of England’s Monetary Policy Committee voted 8-1 to cut the base rate by quarter of a percentage point from 5% to 4.75% in November, bringing some early festive cheer to homeowners and buyers.

Inflation dropped to 1.7% in the 12 months to September, the first time it has fallen below the Bank of England’s 2% target in more than three years, but what does this mean for your mortgage?

The Bank of England’s Monetary Policy Committee voted by a majority of 8-1 to leave the base rate unchanged at 5% in September, although markets are still pricing in further cuts before the end of the year.

Lower mortgage rates helped boost the housing market last month with a growing number of chartered surveyors reporting an increase in new buyer enquiries.

Property prices in August rose to their highest level since 2022, according to Halifax’s latest House Price Index, with the average price of a home in the UK now at £292,505.

House prices are up 2.4% compared to this time last year, according to Nationwide, the fastest rate of annual growth seen since December 2022.

August’s base rate reduction has boosted buyer demand, according to property website Rightmove , with buyer numbers up by nearly a fifth compared to the same period last year.

House prices edged up in July following three relatively flat months, with prices increasing by 0.8% in July and 2.3% annually, the highest annual growth rate seen since January this year.

The Bank of England’s Monetary Policy Committee voted by a majority of 5-4 to reduce the base rate by quarter of a percentage point in August, from 5.25% to 5%

The Bank of England’s Monetary Policy Committee (MPC) voted 7-2 to hold base rate at 5.25% for the seventh consecutive time in June, with homeowners hoping to see a cut later this summer. Two members voted for a 0.25% cut to 5%.

Growing numbers of borrowers are choosing longer mortgage terms so they can keep their monthly payments down and meet lenders’ affordability requirements.

Inflation eased to 2.3% in the year to April, down from 3.2% in March, the Office for National Statistics (ONS) announced this week, providing some relief to those struggling to manage rising living costs.

The Bank of England left rates unchanged in their May announcement

Mortgage rates have edged up in recent weeks amid speculation that the Bank of England may not reduce the base rate until August at the earliest.

The UK rate of inflation fell to 3.2% in March, down from 3.4% in February, and reaching its lowest level since September 2021.

The MPC first voted to leave the base rate at 5.25% in September last year, and it has remained at this level ever since.There was only one member of the Committee that voted for a cut this month. However, it was the first time that there were no votes for a rate hike since base rate hit the current level last August. Last month two members had preferred to see another increase to rates so this shift suggests that we may be edging closer to the point when rates could fall.In the meantime the MPC continues to state that inflation must be under control before they will start to reduce rates.

The Bank of England’s Monetary Policy Committee voted by 6-3 to leave the base rate unchanged at 5.25% in February, despite an unexpected rise in inflation in December. Two members preferred to see base rate rise while one member of the committee voted for a cut.