We’re back to break down the latest numbers you need to know about in the world of housing and mortgages. Our Head of Mortgages, Felicity Holloway, gives her take and shares some practical tips for you to navigate the market, whether you’re buying a home or remortgaging.

 

First interest rate cut moves further into the distance

There hasn’t been a Bank of England meeting since our last market update, and the next one is scheduled for 9th May. However, it seems unlikely that we’ll see the first base rate cut since 2020 announced that day. As of March, CPI inflation was at 3.2% – it’s come down considerably but is still a way off the government’s 2% target.¹ With inflation proving stickier than expected, markets seem to be adjusting to a ‘higher for longer’ interest rate scenario. Most economists are now predicting the first rate cut will arrive in August or September, which is disappointing for aspiring first-time buyers, but could change.

In response to this and increasing swap rates, which lenders assess when pricing their own mortgage products, we’ve seen mortgage interest rates increase very slightly. But, we’re hopeful this rise is only a temporary move from lenders, and that rates will level out again. We often see mortgage interest rates start to come down cyclically in the weeks that follow an initial rate jump, as swap rates settle.

That said, we know the changing market makes it challenging to plan ahead for the future at the moment, regardless of your home-buying or remortgaging situation. We’re here to support you through it, find the right deal for you and offer free mortgage advice on your next steps. We compare thousands of deals that update daily, from over 90 lenders. To get help with your mortgage, head in-app to chat to an expert broker from Moneybox Mortgages.

Your home may be repossessed if you do not keep up repayments on your mortgage.
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Mortgage approvals continue rising against all odds

The number of mortgages approved by lenders has risen for a sixth consecutive month, up from 60,400 in February to 61,330 in March – a stark contrast to the same period last year.² Although we’re yet to see an interest rate cut, it’s possible that buyer confidence has been boosted by the thought of one later in the autumn. Or, it could be that many are choosing to press on with their plans anyway, confident that now is still the right time for them to buy.

 

Housing market also presses on unfazed

Despite all this, the housing market seems to be cranking back into gear. Rightmove are reporting near-record highs in asking prices on their platform and a 12% annual increase in the number of new properties coming to the market.³ It seems that sellers are still feeling positive about their chances, or at least more positive than they have been in recent months.

But, remember to take asking prices with a pinch of salt and look at the UK House Price Index to understand what properties are actually selling for. The index, which includes Land Registry data for all completed property transactions in the UK, shows that prices are down 0.2% in the year to February 2024. This figure masks a lot of regional variation – prices have fallen by 1.1% in England and 1.2% in Wales, but have risen by 1.4% in Northern Ireland and 5.6% in Scotland.⁴

The reality is that most UK buyers are understandably very price-sensitive at the moment. And, with lots more properties hitting the market now, buyers have options again, so are looking to get the best deal possible on their home to partially offset higher mortgage rates.

So, if you’re in the process of making offers at the moment, it’s well worth negotiating on the house price, as the worst your seller can say is ‘no’! If you’re holding off on your plans in the hope of a rate cut, remember that as we’ve seen for the last few months, it’s nearly impossible to time the market correctly. You can only make the right decision for you, with the information you have at the time, and we’ll always be here to help you weigh that up.

 

¹ Source: Office of National Statistics (ONS) CPI Annual Rate of Inflation
² Source: Trading Economics, UK Mortgage Approvals for March 2024
³ Source: Rightmove House Price Index, April 2024
⁴ Source: GOV.UK Land Registry (UK House Price Index for February 2024)