HSBC, one of the biggest lenders in the UK, made cuts to its range as recently as Monday, but will now up the prices on several of its products from Friday.
It comes in a week where several sets of major economic figures were announced, including lower-than-expected inflation and slower growth to the economy than hoped.
Nick Mendes of brokers John Charcol said: “At present, the prospect of sub-4 per cent rates returning seems remote unless there is a significant shift in monetary policy or market conditions. Borrowers should be prepared for rates to stay above this level.”
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Read MoreVirgin Money upped rates by 0.2 percentage points on Wednesday whilst Co-op is increasing fixed rates by 0.59 percentage points on Thursday.
One of Keir Starmer’s key targets for the Government was to improve living standards – something that would be measured by real household disposable income.
Economists warn she may have to make deeper cuts or raise taxes in March to meet her fiscal guidelines if costs do not come down – piling more cost of living pressures on voters.
Despite some mortgage lenders increasing rates, these same lenders may also be cutting them at the same time.
Accord, a smaller lender, is increasing its buy-to-let rates by up to 0.2 percentage points, though it is also cutting rates on its 80 per cent loan-to-value two-year product rate reducing by 0.21 percentage points.
“That will probably prompt others to follow, which will be disappointing for anybody seeking to purchase or remortgage a home in the months ahead. That said, fairly positive inflation data from both the UK in and the US this week has calmed bond markets, which suggests we’ll see a swift repricing, rather than weeks of sustained increases in mortgage rates.”
“Something like a base rate reduction could fuel reductions but until the data with the effects of the Budget start to come through, I think it will be relatively volatile.”
Swap rates follow predictions for where the Bank of England base rate will go in the future, and mortgage lenders base their pricing on these.
Alper Kara, Professor of Banking and Finance at Brunel University, London, said: “Recent UK economic developments, including a slight decline in inflation and lower-than-expected GDP growth, have introduced mixed signals and heightened uncertainty in financial markets.
“Overall, in my opinion, the mortgage market will remain uncertain, and I would not expect further decreases in mortgage rates until this uncertainty eases. However, if the Bank of England cuts rates in February, that could lead to a reduction in mortgage rates.”
Inflation came in at 2.5 per cent in the year to December and experts say this makes the Bank of England more likely to cut rates in February, but warned not to expect mortgage cost falls.
Stuart Cheetham, CEO of MPowered Mortgages, said last Thursday: “We have seen swap rates increase in the past 24 hours which could mean that lenders begin to increase mortgage rates towards the end of the month so the window to secure current deals could be tight.”
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