
The cost of borrowing to buy a home is “unlikely” to return to the low levels seen over the past decade, the head of Britain’s biggest mortgage lender has said.
Lloyds Bank chief executive Charlie Nunn said the bank expected mortgage rates to fall, but not to the level near the zero rates of the 2010s.
Interest rates charged on new fixed mortgage contracts have risen in recent years as a result of higher interest rates to try to curb soaring prices sparked by the coronavirus pandemic and Russia’s invasion of Ukraine.
It has fallen recently following interest rate cuts, but brokers have warned that this trend could come to an “abrupt halt”.
The average two-year fixed mortgage interest rate as of Friday was 5.36%, according to financial information firm MoneyFact. The five-year contract was 5.05%.
Asked on Sunday’s Laura Kuenssberg program on the BBC whether “cheap” mortgage deals would ever come back, Mr Nunn said: “We think mortgage rates will continue to fall, but if we “It will be difficult to return to the level we are thinking of.” I don’t think it’s possible that interest rates have fallen to zero in the last 10 years. ”
Mr Nunn said rising borrowing costs had been “extremely difficult” for homeowners, but pointed out that only around 40% of properties in the UK were mortgaged.
He added that the average income of households with a mortgage was £75,000 and “many of these households have been able to absorb higher repayments”.
He told the BBC: “The number of people in mortgage arrears, or people struggling with their mortgages, has actually fallen again since December.”
High interest rates can affect people in different ways. Mortgage holders on variable or tracker mortgages, or those looking to secure a new fixed rate deal, are facing increased monthly payments.
But first-time homebuyers looking to enter the market are finding it harder to get on the ladder, with prices soaring as it becomes harder to secure an affordable deal. I feel it.
An estimated 1.6 million existing borrowers have relatively inexpensive fixed-rate contracts expiring this year.
The UK benchmark interest rate, which determines the borrowing costs that banks and building societies charge on loans, is currently 5%.
Interest rates were left unchanged last month, saying decision-makers needed to ensure that inflation, which measures the rate of rise in consumer prices over time, remained at normal levels.
Mr Nunn said that although the cost of living “continues to be difficult” in many parts of the UK, 2024 will mark an “unprecedented turning point in terms of the majority of people feeling more financially secure”. said.
“For most people, their symptoms are much better,” he says. “Business confidence is actually at a nine-year high, with more savings in savings accounts and fewer people struggling with loans.”
Mehta calls for more action against online fraud
Separately, Nunn accused tech giant Meta, which owns social media platforms Facebook and Instagram, of allowing people to contact scammers who carry out online scams.
He said: “80% of financial fraud in the UK occurs through big tech companies, and almost 70% through one company, Meta, through Facebook Marketplace, the Facebook platform and the Instagram platform.”
“These allow customers to be contacted by scammers or receive messages encouraging them to make insecure payments,” he added.
“I’ve been listening to the calls and hearing what people are going through when they’ve been scammed. We need to do more to protect our customers, not just compensate them. there is.”
In response, Mehta said its Pilot Fraud Information Exchange Program (FIRE) was designed to allow banks to “share information so they can work together to protect the people who use their services.” Ta.
“Fraud is a multi-sectoral problem that can only be tackled by working together. We encourage banks, including Lloyds Bank, to join this effort,” it said in a statement.

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