Steadying mortgage rates
One of the most significant recent developments in the UK mortgage market is the stabilisation of mortgage rates. Over the past few months, there has been a noticeable shift away from the frequent fluctuations . The stability is attributed to the Bank of England’s proactive measures and its optimistic economic projections, which indicate a possibility of an earlier-than-planned reduction in the base rate.
Fixed-rate mortgages have seen consistent decreases in recent months following a ten year high throughout the summer of 2023. November saw a typical 90% LTV 5-year fixed rate with Nationwide at 4.85% but as I write today (08/02/2024) Virgin Money are offering a 5 year fixed rate at 90% LTV of 4.40%. On a typical house price of £350,000 over a 35 year term this is a monthly saving of £83 pcm.
Market Dynamics and House Prices
The UK property market continues to prove to be resilient. The Halifax House Price Index, a widely respected indicator, reports a robust 2.5% annual increase in house prices. January witnessed a noteworthy 1.3% monthly surge, adding to the positive sentiment surrounding the housing sector.
The Stability Conundrum
With mortgage rates steadying and fixed rates reaching a plateau, the challenge for potential buyers lies in determining the optimal moment to enter the market. Historically, the ebb and flow of interest rates have been a significant factor influencing the decision-making process.
The current stability in mortgage rates, coupled with the potential for a base rate reduction makes this seem like the right time, once again to buy, especially as house prices are on the rise again. It is a delicate balance between mortgage rates and house prices. But with confidence returning to the market early 2024 presents an opportune moment to jump in before the Spring surge.
