Interest rates have driven housing market

Charles Haresnape, managing director for Residential Mortgages, said the combination of Funding for Lending, Help to Buy, NewBuy and 0.5% interest rates has driven on the market.

He said: “First-time buyers have been able to get a mortgage at record low rates with smaller deposits, while landlords and ordinary homeowners have been able to remortgage their properties and save thousands.

“Homeowners should continue to take advantage of low interest rates for as long as they can by overpaying their mortgages as much as possible."

Simon Healy, managing director for savings at Aldermore, said: “For borrowers, low-base rates have allowed many to pay-off their mortgage or buy their first home, but for savers, long-term low-base rates have been damaging.

“In order to simply preserve the value of their cash, savers would have had to chop and change accounts on an unbearably frequent basis meaning it’s been virtually impossible to achieve a positive net rate of return on a consistent basis over the past five years.

“This has created fertile ground for organisations to launch gimmicks such as bonuses and teaser rates which have successfully lured many savers in, but have proved so confusing and dubious in value over the longer term that they have led to an investigation by the regulator."