There is growing confidence amongst mortgage brokers that we will see the return of sub-4% mortgage rates before summer 2024, following the Bank of England’s decision to once again maintain the base rate of interest at 5.25%.

"There is a real possibility that we could see a sub-4% 5-year fixed rate by summer 2024. Expect both downward pricing and improved lending criteria over the next few months"

Nick Mendes, a technical manager at John Charcol brokers, said he was “optimistic” that five-year fixed rates would fall to below 4%, even if the base rate did not drop. Ranald Mitchell, director at Charwin Private Clients mortgage brokers, added: “There is a real possibility that we could see a sub-4% 5-year fixed rate by summer 2024. Expect both downward pricing and improved lending criteria over the next few months, as mortgage lenders attempt to find the tipping point that restores market confidence.”

The industry has also been heartened by Nationwide’s recent launch of a two-year product priced at 4.99%, the first sub-5% two-year fix that has been available since June. Brokers believe that this will create a ‘domino effect’ in which other lenders jostle for business over the next few months, enticing buyers with lower rates and creating a more stable housing market.

Lewis Shaw, at the broker Shaw Financial Services, said “These latest rates from Nationwide are a watershed moment… It should also mean we see other lenders follow suit, leading to a much more competitive market over the next few months when transaction levels drop naturally leading up to Christmas.”