UK homeowners are being warned to be cautious when keeping their house sale proceeds in a bank account after a number of institutions have reduced their interest rates. According to industry experts, several banks and building societies have slashed the interest rates on certain accounts, leaving savers with lower returns on their investments.
The changes have been made without warning, leaving many homeowners unaware that their savings are no longer earning the same level of interest as they were previously.
For example, Nationwide Building Society has reduced its 1-year fixed-rate bond from 2.15% to 1.65%, while Tesco Bank's fixed-rate bond has been cut from 2.05% to 1.55%. These changes have resulted in homeowners losing out on thousands of pounds in interest.
Industry experts are warning that more banks may follow suit, leaving homeowners vulnerable to financial losses. With the average house price in the UK standing at £270,000 (according to property website Rightmove), even a small reduction in interest rates can have a significant impact on savings.