Finally, Some Positive News for Home Buyers?

As you know, recent times have been filled with headlines about rising mortgage rates, making it challenging for many to balance their monthly mortgage repayments against the rising cost of living or moving home to fit their current life circumstances, for example.

However, there are further glimpses of positive news as in recent weeks, a number of major UK lenders have started to reduce their rates, representing a refreshing change to the gloomier news seen earlier this year.¹

Alongside this, Halifax have stated that on average, UK housing is more affordable now than 12 months ago. According to their data, the typical home in the UK currently costs 6.7 times the average earnings of a full-time worker, which is down from 7.3 times, a year ago.²

Some of the key rate changes at a glance

• Nationwide and TSB have reduced rates by up to 0.4% on selected mortgage products.³
• Santander and HSBC have reduced selected rates by 0.20%.⁴
• Skipton Building Society have reduced their 100% loan-to-value mortgage to 6.29%, along with rate cuts to other mortgage products.⁵
• Halifax, part of Lloyds Banking Group, have also stated that a range of price cuts are taking place on their products, including selected five-year rates.⁶

These reductions will bolster hopes that we have seen the peak of mortgage rates, even though borrowers still face near-record costs¹, with the average cost of a two-year fixed mortgage still at 6.76%, compared to the low rate of 2.34% witnessed back in December 2021⁷  for example.

Why are these mortgage rates being reduced?

Recent data showed that UK inflation fell to a 15-month low in June, reversing a sharp increase earlier in the year.¹ Furthermore, the need for lenders to compete in a challenging economic environment has also contributed to the rate cuts.

Looking ahead

Despite these promising signs, major reductions in mortgage costs are unlikely in the short term, with inflation still high and the Bank of England expecting rates to remain higher for longer.¹ However, this recent positive development should not be overlooked, as it provides a glimmer of hope for those either looking to remortgage in the coming months, buy a first home or upsize on their existing property.

What this means for you

These lower rates could open more opportunities to find a mortgage that fits your current needs, whether it’s to help you secure a remortgage, find that dream new property, or help someone in your family to get onto the property ladder for the first time – please do get in touch with us to see how we can possibly help.

We’ll be able to navigate the complex world of mortgages and listen to your exact situation before searching across a wide range of products and strive to help you find one that matches your circumstances, lifestyle and financial goals.

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

Sources

1. The Guardian (2023) NatWest and Virgin Money cut rates as mortgage ‘price war’ spreads. Available at https://www.theguardian.com/money/2023/aug/10/natwest-and-virgin-money-cut-rates-as-mortgage-price-war-spreads (Accessed 21st August 2023)

• BBC News (2023) Housing more affordable than a year ago, the Halifax says. Available at: https://www.bbc.co.uk/news/business-66585755 (Accessed 23rd August 2023)

• Financial Reporter (2023) Nationwide cuts mortgage rates by up to 0.40%. Available at: https://www.financialreporter.co.uk/nationwide-cuts-mortgage-rates-by-up-to-040.html (Accessed 23rd August 2023)

• Financial Reporter (2023) Santander announces further mortgage rate reductions. Available at: https://www.financialreporter.co.uk/santander-announces-further-mortgage-rate-reductions.html(Accessed 23^rd August 2023)

• Financial Reporter (2023) Skipton cuts 100% LTV mortgage rate in wave of reductions. Available at: https://www.financialreporter.co.uk/skipton-cuts-100-ltv-mortgage-rate-in-wave-of-reductions.html(Accessed 21st August 2023)

• Financial Reporter (2023) Halifax announces further cuts to fixed rate mortgages. Available at: https://www.financialreporter.co.uk/halifax-announces-further-cuts-to-fixed-rate-mortgages.html(Accessed 21st August 2023)

• The Times Money Mentor (2023) Will UK mortgage rates continue to go down in 2023?. Available at: https://www.thetimes.co.uk/money-mentor/article/mortgage-rates-uk-news-will-they-go-down/(Accessed 21^st August 2023)

All the information in this article is correct as of the publish date 31^st August 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.