Commenting on the MPC’s decision to reduce the Bank Rate by 0.25% to 4.00%, Paul Broadhead, Head of Mortgage and Housing Policy at the Building Societies Association said:     
 
“With recent BSA research revealing 43% of renters expected to own a home by now, and almost two-thirds (61%) of would-be first-time buyers citing mortgage affordability as a major barrier, today’s decision by the MPC to cut the Bank Rate will be welcomed by many.

“However, our recent report – The Missing Millions – highlights the scale of the challenge for those trying to become homeowners. Mortgage repayments for new first-time buyers are now around 30% higher than in 2020 (22% of income vs 18%), and 2.2 million potential buyers have failed to get on the property ladder since the financial crisis.

“So, while today’s rate cut is a step in the right direction, it won’t be enough on its own to prevent a generation from remaining renters.

“The FCA’s recent Discussion Paper on the future of mortgage lending presents a crucial opportunity to develop a framework that supports responsible, flexible lending, that will support creditworthy buyers into homeownership.

“Alongside this, we must improve the balance between housing supply and demand, which requires Government to deliver its long-awaited housing strategy. It has set ambitious targets for building more homes, but we now need action not words – more homes which are more accessible, more affordable and more appropriate to the needs of those living in them.”

Ends

Contact: pressoffice@bsa.org.uk

About the BSA

The Building Societies Association (BSA) represents all 42 UK building societies, as well as 2 mutual – owned banks and 7 credit unions. Building societies and mutual – owned banks have total assets of almost £650 billion. They hold residential mortgages of over £485 billion, 29% of the total outstanding in the UK. They also hold over £485 billion of retail deposits, accounting for 23% of all such deposits in the UK. Building societies and mutual - owned banks account for 47% of all cash ISA balances.

They employ around 52,300 full and part-time staff and operate through approximately 1,300 branches, a 30% share of branches across the UK.