Following on from the recent announcement by the Bank of England (BoE) that its base rate has been increased by 0.50% to the highest level in 15 years, now at 5%, the wider media has been awash with commentary about a ‘mortgage crisis’.

Some property investors, landlords and developers who have only previously known BoE base rates being at sub 2% or less, may well be feeling somewhat unnerved, as no doubt are some homeowners with variable or base rate tracker mortgages.

The trade body, UK Finance, recently stated that some 2.4m homeowners with a fixed rate mortgage will see their existing deal conclude by December 2024.

Many of these fixed rate deals would have been agreed in recent years at rates below 2% and now the average two-year product is almost 6% and that is not taking into account any lender fees.

Lenders had been anticipating the Bank of England decision and withdrawing hundreds of products, at a time when many buyers were understandably keen to secure a mortgage approval before the product was withdrawn.

The BoE also published its monthly statistics on ‘Money and Credit’ on 28 June, which somewhat contradicts the media-led talk of a ‘crisis’. In the report they highlighted that net mortgage approvals for house purchases in May compared to the previous month were at 50,500 from the 49,000 in April. For remortgaging the figures were 33,600 in May compared to 32,500 in April. In the report the BoE says that the ‘effective’ or actual rate of interest on these newly drawn mortgages was 4.56%. The data also showed that the rate on the outstanding stock of all mortgages was at 2.82% in May.