Bank of England March Base Rate Increase

Perhaps unsurprisingly, the Bank of England increased the Base Rate for the third time since December 2021. Many industry professionals expected this rise due to inflation’s ongoing uphill climb, escalated by the tragic events happening in the Russian war against Ukraine. How can landlords prepare and manage their portfolios to maintain profitability?

For the first time since the pandemic sent us into lockdown two years ago this month, the Bank of England Base Rate is at 0.75%, an increase of 0.25% since February. Looking to curb inflation, this increase comes at a desperate time. Currently, the costs of energy bills, food prices, and fuel are soaring, and families are increasingly needing to choose between heating and dinner due to the exponential rise in living costs. The Russian war on Ukraine has only escalated matters, with sanctions against Russian Oligarchs and boycotting of Russian fuel resulting in yet higher prices.

The Government has set the Bank of England a target inflation rate of 2%. Controlling inflation at this point allows people to save and spend safely and have control over their money. Inflation currently sits at 5.5% and is expected to stay high for a long period of time. Many industry professionals predict an inflation peak of 8% in April; however, if energy prices surge again this year, we could see it increase to 9%.

The Bank of England are not due to meet again until May, but we can expect to see a further increase to 1% in just under two months’ time. The market has begun preparing for the rise, with many lenders already increasing rates by 0.1-0.15% ahead of today’s announcement. We expect nearly all lenders to keep moving up in gradual increments over the summer, as the competitive rates we have been seeing will become unaffordable for lenders as the Base Rate increases.  

Securing property finance at today’s rates could save you significant amounts of money going forward. If you are coming to the end of your current mortgage deal, we can’t encourage you enough to get in touch to discuss your options. We can look into the affordability of paying ERCs to fix onto a new deal and find you a competitive rate that will suit your property finance needs. Submit an enquiry today to speak to one of our expert brokers on 0345 345 6788.

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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