The UK mortgage market is experiencing a new bout of uncertainty, as several major lenders, including Santander and NatWest, have begun to increase their mortgage rates. This move is causing concern among brokers and borrowers, as it comes despite a recent drop in the Bank of England’s base rate.

The rate hikes are a reaction to an uptick in swap rates—the instruments lenders use to price fixed-rate mortgages. This increase in swap rates is linked to recent “stubborn inflation data” and signals that the Bank of England may adopt a more cautious approach to further rate cuts.

While this may seem like a reversal of the recent downward trend in mortgage costs, experts are advising caution against alarm. Shaun Sturgess of Sturgess Mortgage Solutions described the changes as “short-term market adjustments” and “part of a ‘bumpy’ downward trajectory.” He emphasized that the overall trend for mortgage rates is still lower than it was six to twelve months ago, but volatility will continue.

Samuel Mather-Holgate, a financial adviser, placed the blame on the government, suggesting that lenders are raising rates because they expect government borrowing costs to increase due to concerns about the government’s fiscal policy.

The consensus among analysts is that while these “blips” may occur, the general trend for mortgage costs is still expected to be a slow slide downwards toward the end of the year. Borrowers are being advised to focus on long-term affordability and to work with brokers to navigate the fluctuating market.