Sub-4% mortgage rates ‘may be first to go’ following unexpected inflation jump

Sign up to our free money newsletter for investment analysis and expert advice to help you build wealth Sign up to our free money email for help building your wealth Sign up to our free money email for help building your wealth SIGN UP I would like to be emailed about offers, events and updates from The Independent. With inflation rising unexpectedly to 3%, the next rate reduction may be pushed back a little as the Bank of England keeps a close eye on inflationary pressures in coming months Jason Tebb, OnTheMarket “Any news which deviates from market forecasts, is likely to cause rates to rise or fall. Over the coming days, the sub-4% rates that had only just started to come out may be the first to go as mortgage lenders re-look at what they can offer home movers.” Jason Tebb, president of OnTheMarket, said: “Two interest rate cuts in the latter half of last year and one this month have had a positive knock-on effect on confidence, which the market relies so heavily on. We expect the rate of growth in the ONS index to slow over 2025 due to much greater choice of homes for sale, up 11% on last year and higher stamp duty costs for most buyers from April Richard Donnell, Zoopla Jonathan Hopper, chief executive of Garrington Property Finders, said: “The number of homes for sale is so abundant in some areas – even in highly sought-after, prime postcodes – that buyers find themselves firmly in the driving seat and able to drive a hard bargain on price. Additionally, it’s positive that average earnings continue to rise faster than house prices, helping to reset housing affordability and improve access to the market.” Jonathan Handford, managing director at estate agent group Fine & Country said: “If inflation continues to climb, the Bank of England may take a more cautious approach, potentially delaying further rate cuts this year.