A Cautious Descent for Mortgage Rates:
The Bank of England’s decisive rate reduction in May, bringing the Base Rate to 4.25%, marked a significant turning point in monetary policy, followed by a steady hold in June.
This pattern signals a measured, data-dependent approach to easing. While further reductions are widely anticipated later in the year, with forecasts suggesting between two and four additional cuts by year-end, a rapid decline in rates should not be expected.
This deliberate, careful progression means that mortgage rates are likely to continue their gradual downward trend, providing a stable window of opportunity for borrowers to secure more favorable deals.
Is now a good time to fix?
Many clients are opting for 2-year fixes, hoping to benefit again when rates fall further. Others prefer the stability of a 5-year deal. If you’re not sure which route to take, now’s the time to talk to a broker, especially with competitive offers starting to appear across the market.
The Bigger Picture – A Turning Point for the Economy?
- The economic backdrop has continued to shift – mostly in a positive direction:
- Inflation has cooled to around 3.4%, down from the double-digit highs we saw just 18 months ago.
- Wage growth is now outpacing inflation, giving households a little more breathing room.
- Unemployment remains low by historic standards, even as the job market shows signs of slowing.
- Consumer confidence is starting to tick back up, and affordability measures are improving.
- Taken together, it suggests a more stable outlook for the housing and mortgage market – without the volatility of the last two years. It’s not quite a boom, but it’s a solid step toward recovery.
- A More Balanced & Buyer-Friendly Property Landscape:
The property market is demonstrating increased stability, with house price growth moderating despite new records being set. A significant surge in new listings, up 14% year-on-year, means buyers now benefit from a decade-high choice of homes. This expanded supply, combined with improving affordability driven by falling mortgage rates and rising real wages, is creating a more balanced environment that increasingly favors buyers. Encouragingly, sales volumes remain healthy, indicating genuine underlying demand within the market.
The Return of 100% Mortgages
A Pathway with Considerations: The re-emergence of 100% mortgages represents a notable development, offering a crucial pathway for first-time buyers and renters who may struggle with deposit requirements. While these products can be transformative for individuals with strong income but limited savings, it is vital to proceed with caution.
Residential Construction:
Quietly Building the Future: While the broader construction sector continues to face significant challenges, residential housebuilding is showing signs of quiet resilience. This segment returned to marginal growth in June, marking its first expansion since September 2024. This steady progress in new home development, coupled with potential government planning reforms aimed at reducing red tape, is crucial for addressing long-term housing supply needs and supporting a healthy, sustainable property market.
Summer Sizzle for Savvy Buyers!
With an increasing number of homes becoming available on the market and mortgage rates becoming progressively more attractive, the UK housing market is truly heating up for discerning buyers this summer. This period presents a fantastic opportunity to explore available options and find a suitable property.
Lighter Note: Britain’s Favourite Moving Day
Did you know that Friday has been the most popular moving day in the UK for over a decade? And August remains the busiest month for home movers year after year.
It makes sense — people want the weekend to settle in. But it’s worth noting that late-summer Fridays can get hectic for removals firms and completion timelines. If you’re flexible, a midweek move can sometimes save money and stress.
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
