Interest rates stay put at 5%

The base rate continues to be held at 5%, following the Bank of England’s decision to cut it from 5.25% in August. Inflation is now at 1.7%¹, which is important to note as September was the first time it has dipped below the Bank’s target of 2%. Although prices are still rising, it’s happening at a slower rate. While the Bank held rates at the September meeting, the next major interest rate decision will be announced on the 7th November, so we’ll need to wait to see if there are any changes. As well as considering the headline rate of inflation, the Bank is likely to formulate its strategy based on any changes to underlying figures for wage inflation and service inflation. 

​​In terms of mortgage interest rates, we saw high street lenders increase their rates slightly in October, in anticipation of this week’s Autumn Budget. As the year draws to a close, there are still competitive deals out there, so it could be worth continuing to explore your options with a mortgage broker. 

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House prices shoot up

According to the latest UK House Price Index (August 2024 data is released in October), the average house price has risen to £293,000 and the monthly price change is at 1.5%, as opposed to 0.6% in the month before. As a reminder, this index includes data for all sold properties in the UK and is widely regarded as the most accurate index. That’s the sixth consecutive month of price increases, which indicates a strong recovery after a period of sluggish growth.² This data further signals a positive shift in market sentiment with more buyer demand. 

For a more up-to-date view, Rightmove reports on properties advertised on its site and is therefore based on asking prices rather than actual sold prices. They reported a 0.3% rise in asking prices for new properties on their platform in October, which is a much lower monthly increase in new seller activity than expected during this time. The average October rise is typically 1.3%.³

With prices increasing, now could be a good time to house hunt. You could even get a cheaper discount as some sellers might be more motivated to sell before the year ends.

 

Mortgage approvals still improving

Mortgage approvals in September 2024 rose to 65,650, which is the highest in two years and shows continued market resilience. This marks another consecutive month of increases which suggests growing buyer confidence. In August, mortgage approvals jumped up to 64,850. 

The improving economic outlook and lower interest rates are contributing factors to this positive trend and while the market remains dynamic, experts believe it’s likely there will be a sustained recovery in mortgage approvals.

¹Source: Office of National Statistics (ONS) CPI Annual Rate of Inflation

²Source: GOV.UK Land Registry (UK House Price Index for August 2024)

³Source: Rightmove House Price Index, October 2024

⁴ Source: Trading Economics, UK Mortgage Approvals for August 2024