By Mark Dickety on



The Bank of England has held the current interest rate at 5.25% for the sixth time in a row. However, the Bank of England Governor Andrew Bailey said he was “optimistic that things are moving in the right direction”, with the Bank expecting inflation to fall “close” to its 2% target in the next couple of months. City analysts are now forecasting two or three base rate cuts this year, with the first reduction expected to take place in August.

However, rising swap rates and interest rates being maintained at 5.25% for longer than initially expected has meant that many major lenders including Barclays, HSBC, NatWest, Accord and Leeds Building Society have increased their rates in recent weeks. The average two-year fixed rate reached 5.91% this month, having crept up from 5.80% last month (Moneyfacts). The five-year rate has also increased to 5.48% from 5.39% in April. Although borrowers may be disappointed to see rising rates, both the two and five-year fixed rates remain below where they were six months ago in November 2023, at 6.29% and 5.86% respectively. The average standard variable rate (SVR) is currently at 8.18%, down from 8.19% in November 2023, remaining unchanged since the start of April 2024.

Around 600,000 borrowers are due to come to the end of a mortgage deal in the next six months, however lenders are increasingly flexible and most allow switching to a better rate if rates start to fall.

Buy-to-let product availability is showing signs of stability, positive news for landlords after recent months of shrinking choice. Overall buy-to-let product availability rose month-on-month after a reduction in choice of 276 deals between the start of 2024 and the beginning of February. There is a growing pool of products at 80% loan-to-value, good news for landlords with a limited deposit, with the number of deals over two- and five-year fixed rising month-on-month, and up year-on-year.

As we enter the busiest time of the year for the property market, leading indicators are showing promising signs. The UK is officially out of recession after ONS figures showed the economy grew by 0.6% in the first three months of the year. Inflation fell to just 3.2% in the year to March (ONS), and with an interest rate cut expected in the next few months, market confidence is on the rise. Almost two-thirds of agents say that buyer confidence has improved compared to three months ago (Dataloft by PriceHubble poll of subscribers). Mortgage approvals surged to 61,325 in March, an 18-month high and 20% up on the same month last year (Bank of England). There has been a 4% increase in the number of potential buyers registering, showing that buyers are continuing to adapt to market conditions (Propertymark). Transaction activity is slowly building with 84,200 sales taking place in March, the third consecutive monthly rise, indicating a reviving property market, with improving economic conditions easing household financial pressures .(HMRC).

Disclaimer: The above is for information only. Independent regulated financial advice should always be sought when considering mortgage matters.

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Mark Dickety
Mark is an experienced Mortgage and Protection Adviser who has been providing mortgage advice since 2010. He thrives on finding the right solution for each of his clients' requirements ensuring they have the best experience possible.
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