Following the announcement, a number of lenders, including Halifax and Northern Rock, have adjusted their product pricing.
However Alan Lakey, senior partner at Highclere Financial Services, said lenders had anticipated rises to the Base Rate and had made changes prior to the MPC decision. “There was not the lender stampede that we have usually seen following an upwards move in the Bank of England rate, but lenders had made changes to their fixed rate pricing in the months leading up to the decision.”
Following the MPC decision, Halifax confirmed it would be increasing its standard variable rate (SVR), to 6.75 per cent, a move echoed by Northern Rock, which increased its SVR to 6.84 per cent.
A number of lenders have also re-introduced 10-year fixed rate mortgages to their product portfolios in response to the Base Rate decision.
Following the MPC move, Woolwich launched a 10-year fixed rate at 4.98 per cent, available up to 80 per cent loan-to-value (LTV). Commenting on the launch, Mark Parsons, managing director of Woolwich, said: “We believe this is the best 10-year fixed rate mortgage available. Some consumers want complete certainty about their monthly payments and this mortgage gives that certainty. At the same time it gives the flexibility to overpay or port the rate to another property if the economic environment changes.”
Jonathan Cornell, technical director at Hamptons, admitted changes to the Base Rate would be felt during the next few months. He said: “The increase in the Base Rate will deter buyers as many mortgages will cost more. While for many this might not be a significant amount, coupled with oil and energy price hikes, overall living expenses are now very high. The impact of these changes will probably filter through in the next three or four months.”
