Analysts say Mortgage rates have ‘bottomed out’

It is no secret that house-buyers, or anyone looking to remortgage, will have to pay a lot more now, than if they had taken out the same mortgage a year ago.  This is mainly due to the increase in interest rates, the rate of inflation and the instability caused by the previous chancellor.

This instability meant many of us chose to “wait and see” how the market and the interest rates would move before committing to new mortgage products.

But now, analysts in the UK mortgage sector believe the market is seeing the end of falling mortgage rates.

With the Bank of England likely to increase base rates again, some analysts no longer expect five-year fixed rates to fall below previously predicted rates of 3.5 per cent, instead five-year fixed rates would settle at four to 4.5 per cent and this would “become the new norm”.

Many say the current sub-four per cent five-year fixed rates will be the “cheapest we’ll see in a while”.

As the markets have already priced in another rate hike, it is likely that the Bank of England will want to capitalise on the downward trend for inflation and raise rates one more time to try and curb inflation for good. As noted above, it is expected that the Bank of England will raise the base rate again in its upcoming meeting in March.

How We Can Help
This is a crucial time to get in touch with our mortgage advisors, we are frequently asked whether one should opt for a fixed rate or tracker mortgages and if fixing for five years is a better choice than 2 or 3 year fixes.

Our team will be able to review your circumstances, assess your current and future affordability and help you choose the most suitable mortgage product. 

Get in Touch
If you have want to talk about your mortgage please get in touch with our award winning brokers on 0208 364 3444 alternatively follow this link to book an appointment:

Property Market is still on track for a soft landing
Zoopla’s latest House Price Index shows current housing market conditions are close to the pre-pandemic years, with demand 8% higher and sales agreed up 1%.

Buyer demand and sales volumes are 20-50% lower than a year ago but slightly ahead of the pre-pandemic years (2017-2019) Over 40% of homes currently listed for sale on Zoopla have seen their asking prices reduced to attract price-sensitive buyers. These adjustments have been broadly uniform across regions and property type.

Yet in general the market is still on track for a soft landing with modest price falls of up to 5% and 1 million sales in 2023.

Prime London sales market remains resilient
After a weak final quarter last year, price declines in prime London markets appear to be “bottoming out”, the latest Knight Frank sales report reveals.

The report finds that average prices were flat on a quarterly basis in prime central London (PCL) in February. This compares to the decline of 0.6% recorded in the three months to December.

Prices in prime outer London (POL) recorded their first monthly rise of 0.2% in February since September.

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