Falling Mortgage Rates - What to Expect from the Housing Market in 2025
February 2025
Falling Mortgage Rates Helps a Strong Start to Spring - So what can you expect from the housing market in 2025
This month the Bank of England announced a lower base interest rate, with predictions that there maybe more to come in 2025. This is the second time in 2025 that the rate has been cut, giving a boost to the housing market especially, for the first time buyers market. In addition to this, Rightmove reported they had seen asking prices rise with new new sales listings up 10% on last year, and the demand for new mortgages remaining high with the Halifax reporting an increase of 3% and the Nationwide an increase of 4.1%. Land Registry have also announced that their December figures are also up up 4.6% on homes which have completed, which has been very encouraging .
There was a positive reaction by many mortgage lenders, and as a result they have reduced their rates following the Bank decision. Many banks including Halifax, HSBC, Barclays, Coventry Building Society, NatWest and Clydesdale Bank have cut some of their fixed mortgage rates this month . This saw interest rates being cut from 4.75% to 4.5%. Its anticipated that the Bank of England could cut the rate again next month when it is under review again.
The housing market is hoping that there maybe be another two or three interest rate cuts from the Bank of England this year. This news is favourable for those looking to move or renew their mortgages in the coming months, however some finance experts warn that borrowers should remain cautious especially as there was a slight rise in inflation again this month.
Understanding the implications of interest rate changes, either up and down, is crucial for anyone looking to sell or step onto the property ladder this year, or looking to renew their next fixed mortgage deal over the coming months. The importance of being aware of what the implications are for personal budgets should always be discussed with financial professional .
Impact on Sellers
Interest rates directly influence your mortgage repayments and the overall affordability of buying a home. A decrease in rates generally increases buyer enthusiasm, as lower borrowing costs may increase buyer purchasing power and more choice on the market as more sellers put their houses up for sale.
Opportunities for Buyers
A decrease in interest rates could energise the market, creating a favourable seller environment. For first-time buyers, this could also be an opportunity. The current interest rate environment might influence various mortgage products, potentially making some options more affordable and attractive. A steady drop in interest rates mean cheaper mortgages which benefit the lower end of the market - which inturn help the second steppers move up as their next property becomes more affordable.
General Advice
For those pondering a sale in 2025, here's a friendly yet expert piece of advice from Kerr and Co - stay informed and adaptable, register onto the property portals and have your finaces ready so that you can obtain or revise your mortgage quickly. Interest rate trends can offer valuable signals about the best times to market your property.
It's essential to research and seek professional advice tailored to your financial circumstances, as buying a new home is one of the biggest commitments your going to make .
For information on buying or selling your next property contact us on 0208 743 1166 or [email protected]