The Bank of England (BoE) has announced that it has set its base rate at 4.75% – 0.25% lower than the previous rate of 5%. This represents the second such decrease in the past 12 months, giving the UK its lowest base rate in over a year.
While this news will be welcomed by current borrowers and those looking to purchase their first home, the bank has also cautioned that further cuts to the base rate could be slower as it waits for the impact of Chancellor Rachel Reeve’s Autumn Budget to unfold.
UK mortgage rates have been tentatively falling throughout 2024, as both the UK economy and housing market have shown greater resilience than many industry pundits had expected.
Average mortgage rates have fluctuated around 5% in recent months, with the average rate on 7 November 2024 for a five-year fixed-rate mortgage increasing to 4.7%, up from 4.64% the week before according to Rightmove*.
The average rate for a two-year fixed-rate mortgage is 4.95%, up from 4.91% the week before.
Despite this positive news, the BoE has warned that inflation could begin to creep upward as a result of the Chancellor’s budget. Although inflation is not expected to reach the highest peaks experienced following the Covid-19 pandemic and the ongoing war in Ukraine, the bank has hinted that future base rate cuts could be slower in arriving.
For borrowers with fixed-term mortgage deals set to expire soon, or buyers preparing to purchase homes in the coming months, now is the time to speak to a mortgage expert to ensure they secure the best possible deal on their future mortgages.
Clients with standard variable rate (SVR) mortgages may also see their monthly repayments fall; however, any change to SVRs will be at the discretion of individual lenders so borrowers should keep an eye out for updates from their bank.
Landlords looking to grow their investment portfolios will still be coming to terms with the announcement that the stamp duty surcharge for second homes had increased from 3% to 5% as of midnight 30th October 2024.
However, the buy-to-let market should be considered as more of a long-term strategy than a ‘get-rich-quick’ scheme and with demand for rental properties continuing to rise, investors who plan their finances accordingly should continue to thrive in an evolving market.
A potential lowering of mortgage rates alongside a lower base rate could offer landlords an opportunity to mitigate some of the more costly announcements unveiled in the autumn budget.
Again, speaking to an expert broker is crucial in finding the best mortgage for BTL properties and understanding which additional costs may impact the final yield of a growing investment strategy.
If you need mortgage advice, our friendly, professional brokers are waiting to hear from you.
We’ve been pairing clients with their perfect mortgage for over 40 years, comparing the latest rates of 50+ lenders to find the right one for you.
Contact your friendly, professional team using the link below for a fee-free, no-obligation consultation.
Contact Edward Mellor Mortgages
*Rightmove – What are the current UK mortgage rates?
This article does not constitute financial advice. Always speak to an expert before making financial decisions. Your home may be at risk if you do not keep up with your mortgage payments.
