Housing and mortgage market update

The Bank of England (BoE)’s unexpected decision to hold Bank Rate at 5.25% in September fired the starting gun on a fierce battle in the mortgage market. Rates have since been edging down across the board as lenders compete to offer the most attractive deals.

Is it time to fix?

With mortgage rates having fallen from the highs of mid-2023, mortgage holders might be considering locking into a new deal. Indeed, some five and 10-year fixes are now available under 5%, having peaked above 6% earlier in the year.

As always with decisions about mortgage rates, however, predicting the future is close to impossible. That’s why it’s important for borrowers to consider their own affordability and requirements first, rather than trying to guess what will happen next in the mortgage market.

This includes being aware of any changes to your financial situation and planning your budget accordingly.

Stick or twist?

Many lenders let you sign up for a new deal up to six months in advance. This means that you should be able to lock into a rate in advance of your current deal ending. Even if you think your fixed rate deal has several years left, it might be worth checking so you are ready when the time comes.

If you are on a tracker mortgage, meanwhile, your rate will increase or decrease directly in relation to Bank Rate. Standard variable rates (SVR) also rise or fall according to this rate.

Homebuyer demand up

In light of falling rates, enquiries with estate agents about potential house purchases rose by 12% in September1, ending a downward trend in place since April.

Higher demand could stop the decline in house prices, which fell by 4.6% year-on-year in August, according to Halifax, their sharpest annual drop since 2009.

Still a ‘challenging market’

The latest industry survey from the Royal Institution of Chartered Surveyors (RICS) also showed that indicators on demand, sales, instructions and prices all remain in negative territory.

Despite mortgage rates falling, there remains ‘a challenging market backdrop, with stretched mortgage affordability still the dominant factor weighing on buyer demand,’ according to the RICS report.

If you are struggling to keep up with mortgage repayments, it is always advisable to contact your lender as soon as possible. Often, lenders can offer support and discuss what options are available to you.

Speak to us

If you are thinking about remortgaging, fixing a deal or just want to chat about your options, we would be happy to help.  Get in touch today for specialist advice tailored to your unique circumstances.

Your home may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay and early repayment charge to your existing lender if you remortgage.