New Year Mortgage Market Update

22 January, 2025

After a better then expected 2024, we anticipate 2025 to be an even stronger year for purchase business

Although interest rates have remained relatively unchanged over the last couple of months, we expect lenders to start reducing their fixed rates in the coming weeks subject to the Bank of England making a decision to cut the base rate in February – although there is no guarantee of this, there are still indications the Bank of England may decide on a cut to the base rate next month (on the assumption that inflation remains relatively stable).

Residential purchase rates are currently starting at 4.06%, so hopefully it will only be a matter of time before rates fall under the 4% threshold. 

Looking over the next few months, we expect moving enquiries to increase as many people held off a property move in 2023 when the interest rates were higher, opting to remain where they were and take a 2 year fixed product – this year, those people will potentially have access to lower interest rates and will therefore revisit their moving plans. 

We also expect increased activity from First Time Buyers as rent payments continue to increase and become more expensive then potential mortgage payments for an equivalent property. 

As always, please get in touch with a member of the Choice Mortgage Solutions team at your local Pearsons office for up to date advice on interest rates and mortgage criteria.