Bank of England’s interest rate hike: Homeowners tell of their misery
Homeowners and houseseekers today told MailOnline their misery as the Bank of England hiked interest rates to a 15-year high of 4%.
Business owner Victoria Williams, who took out a variable mortgage last month, will now have to pay nearly £1,000 more a year as a result of the announcement.
Meanwhile, NHS worker Rachel Bennett, who has already struggled to buy a home with her husband Jack, says it could now be an impossible dream.
She told MailOnline: “It’s almost impossible to get up the property ladder and now prices are going up even more. It’s an incredibly frustrating situation.’
Victoria Williams, a business owner from Cullercoats in North Tyneside, is dismayed by the Bank of England’s rate hike
Miss Williams, who is buying a property on her own, decided to take a risk and opted for a tracker at 0.80 percent above the base rate.
The 39-year-old, who is five months pregnant, had hoped rates would stay the same or rise only slightly before falling and was dismayed to learn of the hike.
Miss Williams, from Cullercoats, North Tyneside, predicted she would incur additional costs of around £960.
“I had the choice of agreeing on a fixed term of at least two years at about six percent or opting for a tracker,” she said.
“I knew at the time it was a risk but if the policy rate had stayed at 3.5 per cent I would have been hundreds of pounds a month better off.
“With a baby on the way I have to shoulder all sorts of expenses and every penny counts. I also buy alone so I don’t have anyone to share the mortgage with.
“I’m moving from a two-bedroom apartment to a three-bedroom house and my mortgage payments will now triple.
“My heart sank hearing the news on the radio this morning and I feel for first time buyers who will now be completely priced out of the market.
“I’m very fortunate that this won’t cripple me but I work hard and it means making sacrifices while I should look forward to welcoming my new baby.
“I shudder to think what will happen if it keeps going up.”
“Rising interest rates could mean we’ll never be able to afford our own homes again”: Rachel Bennett, 31, with her husband Jack (right) and children Noah, 10, and Lacey, four
Rachel Bennett, 31, lives in South Yorkshire with her 32-year-old project manager husband, Jack, and their two children, Noah, 10, and Lacey, 4.
They are currently renting a two bedroom townhouse from a housing association, with the couple being forced to share the bedroom with their daughter.
Despite finding a “nice property” in the area, they were told the 10 per cent down payment they were offering was not high enough – preventing them from proceeding with the purchase.
Mrs. Bennett says rising interest rates would “potentially” be the difference between her and Jack ever buying their first home.
She told MailOnline: “We have some savings but not much as rising costs and kids mean we can’t put much away every month.
“We both work extremely hard for our money and my husband has a well paying job and excellent credit.
The Bank of England today hiked interest rates from 3.5 percent to 4 percent
“All we want is to buy an apartment and leave something for our children when we’re gone.
“I worry about what the world might be like when they grow up – and probably even harder buying a house! It’s extremely stressful and discouraging.’
The key interest rate was recently raised from 3.5 percent to 4 percent, the 10th increase in a row.
It’s the highest level since 2008 – and mortgage payers must calculate the cost as the bank struggles to contain rampant inflation.
The shift will add £50 to the average borrower’s mortgage payments.
However, there are hopes that the tightening cycle may be coming to an end as the Monetary Policy Committee (MPC) seeks to balance the slowing economy against the threat of rising prices. Gov. Andrew Bailey said inflation appeared “to be over” but it was “too early to announce victory”.
Bank of England Governor Andrew Bailey said inflation appeared to have “turned the corner” but it was “too early to declare victory”.
The bank has also sharply revised down its gloomy estimates for the economy, although it still predicts a mild recession.
Highlighting the huge rise in economic inactivity among the over-50s post-Covid, Mr Bailey warned there was little sign so far that people were returning to work.
Chancellor Jeremy Hunt said he supported the bank’s decision and once again bluntly refuted Tory MPs who were pushing for tax cuts soon.
“We will do our part by ensuring government decisions are in step with the bank’s approach, including by resisting the urge to borrow to finance additional spending or tax cuts now, which only fuels the inflationary fire and the pain will be extended for everyone,” he said in a statement.