The Bank of England governor has told MPs there is still “something of a hangover effect” from last year’s mini-budget market chaos, but declared the mortgage bash was over.

Andrew Bailey used remarks before the Treasury committee to declare that market conditions had returned to normal after the economic competence of the then government of Liz Truss was called into question, throwing bond markets into chaos and driving up costs. of the loans.

Damage caused by so-called growth planOutlined by its short-lived foreign minister Kwasi Kwarteng last September, it had now been largely eradicated, according to Bailey.

He said, “I was hoping we would lower mortgage rates, and that has happened, we’ve seen new fixed-rate mortgage rates come down since then.”

“I’m talking about the lower risk end of the mortgage market, so loans with a loan-to-value ratio below 75%, and actually the higher risk end as well.

“We’ve seen a correction in that regard, and of course that benefits people looking for mortgages.”

While the crisis may be over, data from financial information service suggested fixed-rate mortgage costs were still above mini-budget.

His figures showed the two-year average fixed rate stood at 5.6% on Monday.

The five-year figure was slightly above 5.4%.

Both had been above 4% in the weeks leading up to the government’s Truss handover, but the key reason for the disparity is the Bank’s action to address inflation from the mini-budget through increases in the Bank’s rate. .

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The current availability of mortgage offers is consistent with the number at the beginning of September of last year at about 3,800.

Bailey added that the “risk premium” in the UK interest rate environment had now disappeared – that is, the higher rates required in countries where there is greater economic instability – but added that the “hangover” element was It was due to trust.

“It will take some time to convince people that we are back where we were before,” he said.