Homebuyers and Sellers Await Key Economic Decisions as Mortgage Rates Fall Below 4%
As the property market gears up for the autumn season, many sellers and buyers are closely watching the upcoming interest rate decisions and the contents of the forthcoming budget. Despite inflation remaining slightly above the target at 2.2% as of the end of July, a reduction in interest rates seems unlikely in the immediate term. However, industry experts predict a gradual decrease over the next 12 months, with expectations of four interest rate drops before September 2025.
Malcolm Prescott Managing Director of Webbers Estate Agents comments “Currently, house prices are stable and, in general terms, showing a slight year-on-year increase. This stability, combined with a more positive market sentiment, is expected to boost buyer and seller confidence as we approach the autumn market, when traditionally the West Country market gathers pace” Malcolm continues – “buyers have great choice at present, in all sectors, residential, new homes and premium homes and many buyers are now just wanting to get on and move”
In a significant development, Santander has launched a sub-4% two-year fixed-rate mortgage, signalling a positive shift for homebuyers. This morning, Santander introduced a two-year fixed-rate mortgage at 3.99% for purchases up to 60% loan-to-value (LTV). Although buyers will still need a 40% deposit, this rate marks the lowest for a two-year fix since 2022, highlighting a favourable turn for lenders following the recent interest rate cut.
Justin Moy, director of EHF Mortgages, commented, “This launch of a sub-4% two-year fixed rate is a landmark moment. Aggressive pricing will only intensify competition in the high street over the coming months as they all scramble for market share. Most lenders have struggled to meet challenging targets this year so far. It may only be a 0.2% cut on their existing deal, but the shockwaves will be felt across the lending industry.”
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