Recently, the Bank of England made its first interest rate cut in four years, which had a significant impact on the mortgage rates offered by some of the biggest high street lenders in the UK. This move has sparked a boom in homebuyer activity and is changing the landscape of the housing market.
Following the BOE’s interest rate cut, lenders like Barclays, Halifax, HSBC, and NatWest have been slashing their borrowing costs. Now, they are offering five-year fixed rate mortgages of under 4%, which is below the BOE’s key rate of 5%. This reduction in mortgage rates is a positive sign for potential homebuyers as it makes homeownership more affordable.
The lowered mortgage rates have led to an immediate upturn in buyer activity, according to a report from property portal Rightmove. The number of house hunters contacting estate agents for viewings has increased by 19% compared to a year ago. Additionally, the number of new sellers coming to the market has risen by 5% this month. This increase in buyer activity shows a positive response to the interest rate cut.
Tim Bannister, Rightmove’s director of property science, believes that the rate cut has brought some relief to struggling homebuyers. He expects that this relief will translate into further activity in the housing market through the autumn. With mortgage rates heading downwards, there is a positive sentiment among home-movers, which could lead to an increase in sales and asking prices.
Looking ahead, the BOE is set to meet on September 19 to make a new interest rate decision. Market data suggests that there is a 37% chance of a rate cut in September, with expectations rising to 74% for November. This uncertainty in the market is causing many buyers to closely monitor the outcome of the meeting for signals on the future path of mortgage rates.
The recent interest rate cut by the Bank of England has had a significant impact on the mortgage rates offered by high street lenders in the UK. The decrease in borrowing costs has led to increased buyer activity and a positive sentiment among home-movers. As the market awaits the BOE’s next interest rate decision, potential homebuyers are hopeful for further reductions in mortgage rates, which could boost confidence and activity in the housing market.