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What does the base rate rise to 0.75% mean for you?

The Bank of England has upped the base rate for the third time since December as it attempts to keep a lid on soaring inflation.

The base rate has risen from 0.5 per cent to 0.75 per cent, having been previously upped from 0.1 per cent to 0.25 per cent in December and 0.25 per cent to 0.5 per cent last month.

The decision taken by the Monetary Policy Committee today was made due to inflationary pressures, although economists suggest it will do little to stem cost of living rises triggered by energy, petrol and food prices.

Savers will be hoping that the base rate rise will mean they get better interest rates on their savings accounts. 

Most homeowners who have fixed rate mortgage deals won’t be affected immediately, but are likely to find remortgaging in future more expensive.

Those with variable rate mortgages are likely to see monthly costs rise imminently. 

The Bank of England has upped the base rate for the third time in three months as it attempts to keep a lid on soaring inflation.

The Bank of England has upped the base rate for the third time in three months as it attempts to keep a lid on soaring inflation.

Why raise interest rates?

With inflation at 5.5 per cent as of January and expected to peak over the coming months, the government’s 2 per cent inflation target is far from being met.

The base rate determines the interest rate the Bank of England pays to banks that hold money with it and influences the rates those banks charge people to borrow money.

By raising the cost of borrowing, monetary policy seeks to lower demand for it, which dampens the economy and the amount of money banks create in new loans.

A better return on savings also encourages people to put more money aside, but with rates near rock bottom the effect is negligible. 

Savers will be hoping that the base rate will inject some much needed stimulus into the savings market, particularly given that rates have not risen by as much as some might have hoped, following the previous two base rate decisions.

Mortgage borrowers will be preparing for further rate hikes, with the Bank of England’s decision likely to drive up the cost of borrowing. Mortgage rates have already risen substantially over the past months from the record lows they were at.

What does the base rate rise mean for savers? 

Only one in ten banks and building societies have passed on February’s Bank of England base rate rise to Britain’s long-suffering savers, according to analysis by Defaqto.

In fact, it revealed that only 42 out of 99 savings providers have boosted rates for savers in the past six weeks, with many easy access accounts with top banks still sitting at 0.01 per cent.

After today’s announcement, Yorkshire Building Society announced that it would increase the interest rates on 96 per cent of its variable savings accounts, with the rates going up as much as 0.65 per cent.  

Those keeping an eye on the top of the savings best buy tables will have noticed some positive changes

Those keeping an eye on the top of the savings best buy tables will have noticed some positive changes

Unrestricted access accounts will rise to a minimum of 0.85 per cent, and restricted accounts to 0.90 per cent.  

The average easy access account has only risen by 0.05 per cent since December, according to Moneyfacts, from 0.2 to 0.25 per cent.

However, whilst the situation has barely improved for many savers, those who keep their cash with building societies and challenger banks will likely have seen some positive uplift.

All the major building societies barring Nationwide have passed on most if not all of the previous base rate rises to easy access savers.

Challenger banks, competing with one another at the top of the savings league tables have also kept the top deals ticking upwards.

Prior to the first base rate rise in December, the best paying easy access deal was with Investec paying 0.71 per cent, closely followed by Cynergy Bank paying 0.7 per cent.

Today, Cynergy Bank is paying 0.84 per cent, whilst 11 other providers are paying 0.7 per cent or more.

For those considering putting their money in a fixed rate savings deal, upwards movement has been more noticeable.

The average one year fixed rate has risen from 0.84 per cent to 0.97 per cent since 16 December, according to Moneyfacts.

Those keeping an eye on the savings best buy tables will have noticed some positive changes.

Prior to the December base rate rise, Gatehouse Bank was offering the best one-year deal paying 1.41 per cent, whilst Zopa Bank offered the best two-year deal paying 1.61 per cent.

Today, the best one-year deal has risen by 0.2 per cent, paying 1.61 per cent, whilst the best two-year deal has risen by 0.3 per cent, now paying 1.91 per cent.

So whilst a 0.25 per cent base rate rise is unlikely to send rates soaring, savers can expect to see more of the same over the coming weeks and months.

James Blower, founder of The Savings Guru said: ‘This will feed through to the savings market in a similar way as before – building societies will pass on a good chunk of this to savers, although I doubt Nationwide will.

‘Small banks competing with one another will nudge up best buy rates towards 0.9 per cent on easy access accounts.

‘Sadly I think we are a little way from a 1 per cent best buy, but I do think we will get to that point in the second half of 2022.’

Savers should seek out better deals

With the vast majority of savers seemingly unconcerned about whether their money is earning the best rate, the hope will be that as rates rise, people will become increasingly tempted to move their cash away from the big banks.

Nearly three quarters of the money in easy-access accounts earns a rate of 0.1 per cent or less, according to research by Paragon Bank

Furthermore, a huge £455billion is also sat in UK current accounts, with the typical balance of £5,600 generating an average interest rate of 0.06 per cent.

For savers fed up with a rock bottom rate, there is only one solution. Abandon ship and move your money elsewhere.

‘I can’t see the big clearing banks doing anything other than passing on the rate rise to mortgage borrowers in full and little or nothing to savers,’ said Blower.

‘It is imperative that savers with savings in these big banks switch to make the most of their money, rather than hope their bank will pass it on to them.’

Anna Bowes, co-founder of Savings Champion agreed with Blower.

‘Unfortunately savers can’t depend on their savings providers to pass these on if recent behaviour is anything to go by,’ she said. 

‘The good news is that there is still some competition among providers who are looking to attract new business by paying market leading rates, so it would be good to see rates climb back to levels seen before the pandemic at the very least.

‘So savers need to ditch those providers who are treating them badly and move their money into accounts paying the best rates.’ 

The average two year fixed rate deal has increased by 0.42 per cent since the first base rate rise in December, according to Moneyfacts

The average two year fixed rate deal has increased by 0.42 per cent since the first base rate rise in December, according to Moneyfacts

What does the rate rise mean for mortgage borrowers? 

The Bank of England’s decision will undoubtedly continue to drive up the cost of borrowing across the mortgage market.

Those on their lender’s standard variable rate, discount deals, or a base rate tracker mortgage are the only borrowers that will see their payments increase immediately.

They represents around 20 to 25 per cent of existing mortgage holders, depending on which estimate you look at.

Those with fixed rate deals will be protected for now, but will face the prospect of higher rates when they come to remortgage.

‘Mortgage rates are lower than they were before the financial crisis, but the rate they are rising at is quite dramatic 

Simon Gammon, Knight Frank Finance 

David Hollingworth, associate director at L&C Mortgages said: ‘Although lenders don’t necessarily have to lift their standard variable rate by any base rate rise, borrowers should assume that is likely and many of the main lenders have followed the last two base rate hikes.

‘With living costs climbing there’s still a great opportunity for borrowers to take control of their biggest outgoing and lock down their mortgage rate.

‘ I expect that fixed rates will only grow in popularity as borrowers look to protect against further rises, especially in light of rising costs that they can do little about.’  

Simon Gammon, managing partner at Knight Frank Finance, said that some borrowers who had fixed their mortgage on a two-year deal last year, could see the interest they pay more than double by the time they came to remortgage. 

‘Lenders don’t need much of an excuse to put their rates up,’ he said. ‘There will probably be another round of mortgage products being withdrawn from the market, and then replaced with ones on higher rates. 

Monthly rise in SVR mortgage costs following further base rate rises 
Mortgage amount BoE rise to 0.75 BoE rise to 1.00 BoE rise to 1.25   BoE rise to 1.50  
£150,000 £21  £42 £63  £85   
£200,000  £28  £56  £85  £113   
£300,000  £42  £84  £127  £170   
£450,000  £63  £126  £190  £255   
Based on repayment mortgage over 25 years showing payment increases based on a current SVR of 3.99% that lifts in line with Base Rate. Credit L&C Mortgages.          

‘Mortgage rates are lower than they were before the financial crisis, but the rate they are rising at is quite dramatic.

‘Six months ago, you could get a five-year fixed mortgage at around 1 per cent – now the best deal is just under 2 per cent.

‘If I was a first-time buyer and I’d bought my first home a year ago, and completely maxed out how much I could borrow, I could be looking at the interest I am paying now doubling in a year’s time.

‘It is a big jump. It will have much more of an impact on many people’s lives than, say, fuel costs going up.’

What has happened to mortgage rates so far? 

Fixed rate mortgages, however, are on the rise so borrowers may be wise to fix in as soon as they can. 

The average two year fixed rate deal has increased by 0.42 per cent since the first base rate rise in December, according to Moneyfacts, from 2.38 per cent to 2.8 per cent.

The average two-year deal for those requiring a mortgage covering 90 per cent of a property’s value has risen by 0.34 per cent from 2.55 per cent to 2.89 per cent during that time.

For equity rich homeowners the difference will be more noticeable. The average two-year deal for someone with 40 per cent equity or more in their property has risen by 0.55 per cent since 16 December, from 1.72 per cent to 2.27 per cent.

At the time of the first base rate rise on 16 December 2021, the cheapest two-year fixed rate deal for someone with either a 40 per cent deposit or equity was offered by Barclays paying 1.11 per cent with a £999 product fee.

As of today, the cheapest two year fixed rate deal for a mortgage covering 60 per cent of a property’s value is offered by Coventry paying 1.75 per cent with a £999 product fee.

This means someone with a 25-year £180,000 repayment mortgage on a £300,000 property eligible for the cheapest rate will be paying £741 a month today compared to £688 a month before the first base rate rise.

Interest Rate Rise / Fall Calculator

Work out how much extra or less you would pay on your mortgage if your lender changes the rate you are paying. Enter a negative value eg (-0.25) for a rate cut.

Those needing to remortgage this year are being advised to plan ahead and lock in a rate as soon as possible.

Those needing to remortgage this year are being advised to plan ahead and lock in a rate as soon as possible.

What should you do if you need to fix your mortgage? 

With further base rate rises expected as the Bank of England attempts to stem the inflationary surge, mortgage borrowers can expect mortgage rates to continue in an upward direction this year.

Those looking to buy over the coming months are being encouraged to lock in to longer fixed rate deals. You can check the best mortgage rates you could apply for and see monthly costs  with our L&C-powered calculator.

Longer term deals have on average seen less extreme rate hikes since the first base rate hike.

The average 5-year deal has increased by 0.31 per cent from 2.66 per cent to 2.97 per cent according to Moneyfacts. 

In fact, those prepared to lock in for up to 10 years will typically be able to secure a cheaper deal than they would back in December.

The average 10-year fixed rate has actually dropped from 2.97 per cent to 2.9 per cent.

Swen Nicolaus, chief capital officer at Molo said: ‘For people who are looking to buy a house and are worried about how inflation will impact mortgage rates, we’d recommend exploring longer term fixed rate mortgage options. 

‘While it’s difficult to predict when, where and how the impact of rising interest will set in for mortgage rates, a long term fixed rate can mitigate some of the risks and provide stability.’ 

Those needing to remortgage this year are being advised to plan ahead and lock in a rate as soon as possible.

Hollingworth said: ‘Anyone that is already in a fixed rate will have the benefit of being protected from the market movement and from the decisions around base rate. 

With some lender offers being valid for up to six months there is an opportunity for borrowers to start the process sooner than they think 

‘That’s a positive but it makes sense for them to consider how long that fixed rate lasts for so they can diarise an appropriate time to review. 

‘With some lender offers being valid for up to six months there is an opportunity for borrowers to start the process sooner than they think, which could prove beneficial if rates continue to push up. 

‘In any case it is generally advisable to start at least three months before the end of the current deal as it allows time to not only get the mortgage offer but for the legal work to be conducted allowing for a smooth switch across and avoiding a period of reverting to the lender’s standard variable rate.’ 

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Living in a surfer’s paradise! Chic townhouse with incredible floor-to-ceiling windows overlooking beach in Cornwall goes on the market for £2.75million

A chic townhouse with breathtaking views over a surfer’s paradise has gone on the market for £2.75m.

Gwel Tresla has incredible floor-to-ceiling windows looking out over the surf mecca of Polzeath, Cornwall, and even has a sky hammock to take full advantage of the panoramic views.

The five-bedroom home is one of three striking contemporary townhouses completed in 2020 with high specifications and smart technology throughout and has been a successful holiday let with Latitude 50.

The property is arranged over four storeys with reversed living accommodation to make the most of its incredible beachfront and west-facing position, which means the owners will get to enjoy spectacular sunsets.

It has 2,863 sq ft of accommodation with the entrance lobby and a double bedroom with en suite on the ground floor, and four bedrooms and four bathrooms on the first floor.

Gwel Tresla in Polzeath, Cornwall is on the housing market for £2.75million

Gwel Tresla in Polzeath, Cornwall is on the housing market for £2.75million

The property is located in the small seaside resort village overlooking the beach that is popular with surfers

The property is located in the small seaside resort village overlooking the beach that is popular with surfers

The property is arranged over four storeys with reversed living accommodation to make the most of its incredible beachfront and west-facing position

The property is arranged over four storeys with reversed living accommodation to make the most of its incredible beachfront and west-facing position

On the second floor there is an impressive open plan living space with a kitchen/dining area

On the second floor there is an impressive open plan living space with a kitchen/dining area

The kitchen has a breakfast bar where the owners can enjoy a meal as daylight shines in through the floor-to-ceiling windows

The kitchen has a breakfast bar where the owners can enjoy a meal as daylight shines in through the floor-to-ceiling windows

There is a built-in-bar on the other side of the kitchen which is perfect when hosting guests

There is a built-in-bar on the other side of the kitchen which is perfect when hosting guests

On the second floor there is an impressive open plan living space with a kitchen/dining area with built-in bar at one end and a living area with a vaulted ceiling and a sea-facing balcony at the other.

The top floor has another living area/TV room with the sky hammock looking out over the beach and a bathroom. There is also a large covered terrace with built-in outdoor kitchen and barbecue.

Outside there is secure underground parking for two cars, a lockable surf and equipment store and outdoor hot and cold showers.

The house is just 25 yards from Polzeath Beach, a popular holiday spot with safe bathing and surfing and a vast expanse of beach.

Polzeath is close to the other popular resorts of Rock and Padstow and has a number of excellent restaurants and pubs nearby, great watersports opportunities and walking and golf.

The reversed living accommodation allows the owners to enjoy beautiful sunsets from the living room

The reversed living accommodation allows the owners to enjoy beautiful sunsets from the living room

The top floor has another living area that leads out onto a large covered terrace

The top floor has another living area that leads out onto a large covered terrace

There is a sky hammock on the top floor looking out over the beach

There is a sky hammock on the top floor looking out over the beach

The covered terrace has built-in outdoor kitchen, barbecue and seating

The covered terrace has built-in outdoor kitchen, barbecue and seating

Josephine Ashby from John Bray Estates said: ‘This striking architectural design, by Studio Arc Architects, delivers on all fronts, with breath-taking coastal views from all the principal rooms, and high specifications and smart technology throughout.

‘Completed in 2020, Gwel Trelsa is the dream beachfront property, offering comfortable and spacious accommodation that seamlessly blends comfort and luxury, resulting in a highly desirable family home or holiday home.

‘Situated in a prime frontline position at Polzeath, Gwel Trelsa commands front line views across the beach and over the surrounding coastline.’

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The 11 things that make your garden look tacky, revealed by a top expert – including the flower colour that just screams cheap

A well-maintained garden may be a relaxing retreat – but it can also boost the kerb appeal and even the value of your home.

But, if done the wrong way, efforts to enhance your outside space can leave it looking cheap.

From choosing the wrong plant pots to – counterintuitively – being too tidy, the Mail’s gardening editor looks at the 11 common errors that can cheapen your garden, rather than helping it thrive. 

When tidy is too tidy

Many of us were brought up with strict ideas about well-kept gardens, with lawns neatly mown and weeds all pulled up. But that is no longer the prevailing aesthetic.

Letting go a little and being slightly untidy can lead to a more expensive looking haven. And leaving self-sown plants in summer and seed heads over winter will make your garden look more expensively abundant. Phew!

Wildflower beds with self-sown plants are now the prevailing aesthetic

Wildflower beds with self-sown plants are now the prevailing aesthetic 

Yellow’s not mellow

Don’t get me wrong, I have a soft spot for bright yellow flowers such as daffodils and sunflowers. But such garish flowers must be used in the right context.

Expansive garden beds the colour of a hi-vis vest? It’s a no. Yellow is difficult to match with other colours and should be used sparingly.

The perils of artificial grass

The quickest way to make your garden look cheap is to lay artificial turf. Used widely in sporting venues, fake grass became popular because it doesn’t need to be mowed or watered so is seen as low-maintenance and hard-wearing. But it almost always looks naff.

Plus, the disadvantages far outweigh the benefits. It is ruinous for wildlife and adds to global warming by absorbing more radiation than living grass, which acts as a carbon sink. Natural lawns allow rainwater to be soaked up, whereas artificial grass can cause run-off after heavy rainfall leading to flooding.

In hot weather, it can reach dangerous temperatures, especially for pets who might burn their paws. Plus, it only has a lifespan of ten to 20 years, after which time it is difficult to recycle.

 Soulless bare fences

Fences without greenery can make your garden look boxy and cheap. There are plenty of easy climbers you can plant to soften the feel and make your garden look more high-end.

Star Jasmine is a lovely evergreen with pretty white flowers, while climbing hydrangea is good for a shady corner.

If you want privacy, remember evergreen hedges can’t be more than 2m high, according to the High Hedges Act. Instead try planting deciduous silver birch trees with attractive white trunks and green foliage in summer when you are out in the garden.

Don’t settle for plastic furniture

Moulded plastic chairs are unsightly and should be avoided at all costs. Plus, they’re uncomfortable and topple if you lean too far back, or slice into any bare flesh unfortunate enough to touch the seat.

If your budget won’t stretch to buying new wood, rattan or metal alternatives, search local online groups to see if anyone has second hand deck chairs or outdoor dining sets on offer.

If you are willing to buy something preloved and weathered, it can often cost less but look more expensive.

Thin borders, a thing of the past

Narrow flower beds around the edge of a rectangular lawn used to be thought of as the ideal garden design, but these days it just looks scrimping.

Borders should be at least a metre deep to allow for multi-layered planting. Don’t just put them around the perimeter of your garden. Flower beds used to divide up a space add a touch of mystery and look much classier.

Gadgets and gazebos

Barbecues, fire pits, corner sofas, gazebos, over-sized paddling pools – its easy for your outdoor space to become cluttered with so many garden gadgets you can’t move around without tripping over them.

Decide what you really need and use often, then recycle the rest. Or store them away neatly in the shed until you want to use them.

Plastic plant pot horror

It is tricky to keep plants looking good in plastic containers, even the ones that attempt to imitate terracotta.

As well as the lack of sustainability, the trouble with plastic is that unlike materials such as wood and stone, it provides no protection for plants against drying out in summer and freezing in winter, and it is not breathable.

If you do have plastic pots, reuse them for propagating and save your best non-plastic containers for display purposes.

Paving the way to disaster  

Every gardener needs somewhere to sit, but this shouldn’t come at the expense of losing too much of your lawn.

Ideally there should be a ratio of at least two-thirds planting and grass to one-third hard surface. If you are putting in a new patio, consider leaving gaps between the pavers for low plants such as creeping thyme and Mind-Your-Own-Business which will also help with drainage. 

If you want to park your car in your front garden, choose a permeable surface with planting around the edges.

Fly-away greenhouses

I must confess I own one of these mini shelving units covered in a zip-up, see-through plastic smock. But after it fell over outside one too many times in windy weather, despite being tied to the wall, I have brought it in to our lean-to where I now use it as a propagating unit. A pile of overturned seed trays and spilled soil does nothing to add to kerb appeal.

Do away with dead pot plants 

Well-tended container planting can add a cheerful welcome to a garden or balcony, but there is little as off-putting as being greeted by a collection of unidentifiable shrivelled dead plants in pots.

Avoid this by doing your research and choosing plants you love which will encourage you to water and feed them regularly. Having a water butt nearby makes this task much easier.

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Assessing Property Size: What Square Footage Can You Get With The Average UK House Price In Your Area?

Assessing Property Size In The UK

In the United Kingdom, there is a prevailing tendency to gauge the size of residences based on the number of bedrooms rather than square footage. In fact, research indicates that three out of five individuals are unaware of the square footage of their property.

However, a comprehensive analysis conducted by Savills reveals significant variations in property sizes throughout the country. For instance, with the average property price standing at £340,837, this amount would typically afford a studio flat spanning 551 square feet in London, according to the prominent estate agency.

Conversely, in the North East region, the same sum would secure a spacious five-bedroom house measuring 1,955 square feet, nearly four times the size of a comparable property in London.

Best value: Heading to the North East of England is where buyers will get the most from their money

In Scotland, the median house price equates to a sizable investment capable of procuring a generous four-bedroom residence spanning 1,743 square feet. Conversely, in Wales, Yorkshire & The Humber, and the North West, this sum affords a slightly smaller four-bedroom dwelling of approximately 1,500 square feet, while in the East and West Midlands, it accommodates a 1,300 square foot home. In stark contrast, within the South West, £340,837 secures a modest 1,000 square foot property, and in the East, an even more confined 928 square feet.

London presents the most challenging market, where this budget offers the least purchasing power. Following closely, the South East allows for 825 square feet of space or a medium-sized two-bedroom dwelling. Lucian Cook, head of residential research at Savills, emphasizes the profound disparity in purchasing potential across Britain, ranging from compact studio flats in London to spacious four or five-bedroom residences in parts of North East England.

While square footage serves as a critical metric, with a significant portion of Britons unfamiliar with their property’s dimensions, the number of bedrooms remains a traditional indicator of size. Personal preferences, such as a preference for larger kitchens, may influence property selection. For those prioritizing ample space, Easington, County Durham, offers a substantial 2,858 square foot, five-bedroom home, while Rhondda, Wales, and Na h-Eileanan an Iar, Scotland, provide 2,625 and 2,551 square feet, respectively. Conversely, in St Albans, Hertfordshire, £340,837 secures a mere 547 square feet, equivalent to a one-bedroom flat.

The disparity continues in central London, where purchasing power diminishes considerably. In Kensington, the budget accommodates a mere 220 square feet, contrasting with the slightly more spacious 236 square feet in Westminster. Conversely, in Dagenham, the same investment translates to 770 square feet. Three properties currently listed on Rightmove exemplify the diversity within this price range across the UK market.

South of the river: This semi-detached house is located near to three different train stations

South of the river: This semi-detached house is located near to three different train stations

2. Lewisham: One-bed house, £345,000

This one-bedroom property in Lewisham, South London, is on the market for £345,000.

The semi-detached house is set over two floors, and has a private patio.

The property is located near to bus links and amenities, as well as Catford train station.

Edinburgh fringe: This three-bed property is located on the edge of the city, near to the town of Musselburgh

Edinburgh fringe: This three-bed property is located on the edge of the city, near to the town of Musselburgh

3. Edinburgh: Three-bed house, £350,000

This three-bedroom detached house in Edinburgh could be yours for £350,000.

The house, which has a two-car driveway, boasts a large kitchen diner, and is within easy reach of Newcriaghall train station.


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