Reflecting on the latest interest rate decision and on what’s next for buyers and homeowners

As there is no sign of inflation declining rapidly any time soon, it looks like we’re stuck with higher interest rates for the foreseeable future and with one third of the UK population owning their home with a mortgage, a significant number of people continue to be impacted by these increases, and those on variable-rate deals are facing the worst of it.

While fixed rate mortgages have seen slightly more stability as of late, those due to come off their current product will still feel the impact of increased monthly payments as a result of their remortgage or product transfer. So, where do we go from here?

Given that the constant rate rises aren’t bringing inflation down quickly enough in line with the BoE’s expectations, there is a distinct need for the Monetary Policy Committee to consider other approaches. If we take a look at how the wider market is reacting to these rate rises, we can see that there’s a much more balanced, optimistic perspective of how the market is performing.

Food inflation has also begun to gradually decline and lenders are also reducing their own rates, as well as being innovative with their products, with an increase in the number of 95 per cent and 100 per cent mortgages available. So, it is clear from this approach that lenders very much still want to lend and do right by their customers by making homeownership more accessible in a challenging market.

While there may be no hard and fast solution to curbing inflation, reevaluating the BoE’s current strategy of continuous rate rises is essential. It wouldn’t be a surprise if rates continued to hike for the foreseeable, but there is a need for alternative inflation control measures, as it’s clear that the bank’s current strategy is not having the desired effect.

For one, there is not enough time to see the impact of these rate rises between each announcement, so keeping the rates steady to measure its effect would certainly be one such approach to consider. As for seeking mortgage advice, despite the economic climate, it’s not all doom and gloom. Lenders are looking to drop their rates due to a better market outlook.

What’s more, many of those looking to saveare seeing their savings accounts boasting the most competitive rates in years. If you’ are coming up to the end of your deal, or are thinking about buying your first home, navigating the economic climate can be made easier with the help of a mortgage adviser.

Andrew Milnes is business principal at the Mortgage Advice Bureau, Bingley