- Mortgage Rate Reductions Amidst Bank of England Interest Rate Hike
- Halifax, HSBC, TSB, and Nationwide Among Lenders Lowering Rates
- Housing Market Slowdown and Declining House Prices Fuel Rate Cuts
HSBC, Nationwide, and TSB have also reduced prices on certain products this week, despite the Bank of England’s decision to raise interest rates for the fourteenth consecutive time.
This week, Halifax became the latest lender to reduce mortgage rates by announcing reductions of up to 0.71 percentage points.
Other banks, including HSBC, TSB, and Nationwide, have also reduced rates in recent days. Nationwide reduced the price of some of its products by up to 0.55 percentage points.
It comes despite the Bank of England’s decision last week to raise interest rates for the fourteenth consecutive time to curb inflation.
Halifax, the largest mortgage lender in the United Kingdom, announced that new offers would be introduced on Friday, including a five-year fixed rate offered at 5.28%, a 0.71 percentage point decrease.
The interest rate on two-year fixed-rate loans will reduce by up to 0.27 percentage points.
The hurry to reduce interest rates coincides with a slowdown in the housing market, with experts warning that increased mortgage affordability is hurting demand.
Nationwide reported the largest annual decline in house prices in fourteen years on its index last week, citing a 3.8% decrease in property values in July.
Separate data from Halifax revealed a 2.4% year-over-year decline in July.
Imogen Pattison, an assistant economist at Capital Economics, predicted that price declines would persist over the next few months and possibly accelerate in the following year.
The Bank of England has cautioned that interest rates are likely to remain elevated in the coming months, even though inflation is declining and recently fell to 7.9%, a larger decline than anticipated.
