Mr Bailey told a committee in the House of Lords: “I do think we have moved into an era where we have had very big supply shocks operating on the economy and on inflation. This was a significant drop compared with an average profit margin of 23pc between 20.Īndrew Bailey, Governor of the Bank of England, said he is poised to launch a review into what went wrong during the pandemic and its aftermath to cause Britain’s deepening inflation crisis. Profit margins for landlords with mortgages fell below 4pc in the first three months of 2023, according to new analysis from Savills estate agents. Buy-to-let profits have plunged to their lowest level since 2007 as interest rates and a government crackdown on the sector pile pressure on landlords’ finances. Landlords are also taking punishment from the higher rates. Mortgage lending fell sharply in the first three months of the year as buyers pulled back in the face of rising costs.Ī total of £58.8bn was loaned out to homebuyers, down almost one-quarter compared with the same period of 2022 and the lowest level since the depths of the pandemic lockdown of spring 2020. Separate Bank of England data showed the property market is already feeling the strain of higher rates. The buoyant jobs market raises pressure on the Bank of England to go further to tackle inflation, which remains more than four times higher than its target.Įxpectations of further rate rises sent the yield on two-year gilts as high as 4.9pc, surpassing the peak of 4.65pc reached after Liz Truss’s mini-Budget last September. Official data on Tuesday showed average earnings jumped at the fastest rate on record last month and unemployment registered a shock fall. The spokesman added: “There do remain a large range of mortgage deals available to the public, but we know this current situation may be concerning for some homeowners and mortgage holders.” He said: “The Chancellor has made clear his expectation that lenders should live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.” The Prime Minister’s spokesman told banks to look after customers who were struggling with the jump in costs.
Mortgage rates have soared since late May, with a typical loan from Halifax rising from 4.59pc to 5.41pc – adding almost £100 to the monthly repayments of a homeowner with a £200,000 debt, according to L&C Mortgages.
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