A warning has been given to borrowers and the home owning public by Paul Broadhead, head of mortgage and housing policy at the Building Societies Association. 

“For many mortgage borrowers it might feel like we’ve finally turned a corner, with inflation reducing and new mortgage rates nudging down. 

“However, whilst the Bank of England’s Financial Policy Committee recently reported fewer households with significant financial vulnerability, we’re not out of the woods yet.  

“Almost half (around 45 per cent) of today’s fixed-rate mortgages are on rates agreed before the Bank Rate started to increase in December 2021. 

“Borrowers on these mortgages will be coming off their fixed rates in the next three years, and should be preparing for a significant increase in their mortgage payments. 

“So, whilst it was reassuring that this month’s [BSA] Property Tracker report 85 per cent of borrowers say they are confident that they can maintain their mortgage payments, lenders must still be alert to those families and individuals who may experience financial difficulties in the coming months. 

“Practical, tailored support will continue to be offered to anyone who may be struggling.”

Bank of England governor Andrew Bailey is also being cautious, saying it is “too early” to speculate about when interest rates will be cut.

The Bank recently voted to hold interest rates for a third time at 5.25 per cent – a 15-year high – but Bailey insists a cut is still some way off.

He says: “We have seen an unwinding of many of the shocks, the big shocks, that we had last year, particularly related to the war in Ukraine and so on.

“But there is this persistent element to [inflation] which we have got to take out.

“My view at the moment is it’s really too early to start speculating about cutting interest rates.

“I don’t think that we can say definitively that interest rates have peaked. I hope that we are at the top of the cycle.”