The Bank of England cut its base rate by o.25% to 5% on Thursday to stop the economy’s slide towards recession. However, relief for home owners was instantly undermined by a new wave of mortgage rate increases from Britain’s biggest lenders. Many lenders are yet to pass on the recent base rate reductions - instead they are busy increasing rates, demanding larger deposits, tightening lending criteria and, in some cases, withdrawing deals from the market altogether. Most of the big lenders, including Halifax, Nationwide, the Woolwich, Cheltenham & Gloucester and First Direct also said within minutes of the Bank’s announcement that they will be cutting their standard variable mortgage rates by the full 0.25%. Both Nationwide and Alliance & Leicester are believed to have been overwhelmed by applications from borrowers coming off cheap fixed deals and want to choke off the demand with yet another big increase of upto 0.35% in less than two weeks. The increases followed similar moves from Woolwich, Halifax and Abbey.
Tags: Abbey, Alliance & Leicester, Bank of England, Cheltenham & Gloucester, First Direct, Halifax, mortages increases, Nationwide, Rate reduced, recession, the Woolwich