The first month of the new year has seen Halifax, the UK’s biggest lender, cut interest rates by close to a whole percentage point. Interest on their two-year fix was cut by 0.83%, with HSBC swiftly following suit by introducing new deals including a five-year fix at 3.94%.
The first month of the new year has seen Halifax, the UK’s biggest lender, cut interest rates by close to a whole percentage point. Interest on their two-year fix was cut by 0.83%, with HSBC swiftly following suit by introducing new deals including a five-year fix at 3.94% and a two-year fix at 4.49%. Leeds Building Society also announced it had “decided to start strong in 2024” by reducing rates across its range of product by up to 0.49%.
"More banks and building societies are likely to improve their rates, fighting it out to offer the cheapest deals"
David Hollingworth, associate director at broker L&C Mortgages, said: “These cuts are just the latest salvo in an increasingly fast-moving market…offering some of the lowest rates since the spike in rates last summer.” Aaron Strutt, product director at Trinity Financial said: “It seems highly likely that more banks and building societies will improve their rates over the coming weeks and fight it out to offer the cheapest deals.”
With buyers now able to access a range of mortgage options at well under 5% and even some below 4% for the first time in several months, their monthly repayment budgets are less stretched and they are able to offer higher prices to secure their next or first home. We expect to see this new mortgage rate landscape exerting upwards pressure on prices over the course of the year.
November marked the fifth consecutive monthly UK house price rise and the biggest leap so far this year, according to Halifax. The mortgage lender said property values were up 1.3% compared with October.
We expect positive price growth this year – in a climate of falling mortgage rates, improving affordability and the release of some pent-up demand. Rightmove reported that first-time buyer demand in the capital in September 2024 was 28% ahead of 2023, moving up to 31% after the autumn budget.
International property company JLL has said it expects Greater London house prices to increase by 22% over the next 5-years, beating nationwide UK growth predictions of 20% over the same time span. The firm added that within those headline figures, it expected lower value markets to see stronger growth towards the beginning of the period, with more expensive markets like London and the South East outperforming in the second half.