Major UK banks including HSBC, NatWest and Barclays increase mortgage rates

The average house price in Sunderland is £147,319
Major UK banks including HSBC, NatWest and Barclays increase mortgage rates -Credit:PA

Several major UK banks, including HSBC, NatWest, and Barclays, are hiking their mortgage rates amid growing concerns that the Bank of England might not slash interest rates as early as once expected.

Barclays has upped its rates by 0.1 percentage points on a selection of mortgage products, while NatWest has increased rates on certain two and five-year "switcher" deals for existing customers by the same margin. HSBC is also ramping up rates today.

Leeds Building Society is raising some fixed-rate mortgages, including those on interest-only deals, by as much as 0.2 percentage points. Accord Mortgages has hiked rates on some of its offerings by 0.4 percentage points.

Moneyfacts reports that the average two-year fixed residential mortgage rate currently stands at 5.83%, with the five-year fix at 5.40%.

This shift comes as analysts revise their forecasts regarding when they expect the Bank of England to lower interest rates. Initially, it was thought the Bank would begin reducing the base rate, now at 5.25%, from June due to declining inflation, reports the Mirror.

However, newer data suggests inflation is decreasing more slowly than anticipated.

Pete Mugleston, managing director at, commented: "This is a concerning move whilst the economy is in such a fragile state. What the housing market really needs is a show of faith by lenders especially to try and support the Bank of England."

"Keeping mortgage rates at a lower level could have really kickstarted the first-time buying market which, as we know, then has a greater positive impact further up the chain. The uncertainty that we're experiencing highlights the significance of consumers needing to secure a rate as soon as possible, as this could potentially save them a large amount of money in their mortgage journey."

Up until recently, the Bank of England had been attempting to suppress inflation by raising its base rate. This base rate influences the interest rate offered by banks and lenders - meaning higher rates result in pricier borrowing and subsequently less discretionary spending.

The reduction in consumer spending can reduce demand and decrease prices, thereby aiming to curb inflation. The base rate has remained consistent at 5.25% throughout the last five Bank of England meetings.