Mortgage Market Update: Echoes, Uncertainty & Green Shoots

23 April, 2025

Five years on from “you must stay at home”, those words still bring a chill — a sharp reminder of just how much life has changed. From kitchen desks and Zoom fatigue to countryside relocations and the Great Sourdough Bake-Off, the last half-decade has transformed how we live, work, and move — especially when it comes to property.

The world has reopened, but we’re still navigating the aftershocks. Working patterns remain fluid, mental wellbeing is under a microscope, and for many, the new normal feels anything but. For brokers, the laptop-and-latte lifestyle continues, but across the wider economy, the dust is far from settled.

Welcome to Angry April — with rising energy costs, council tax hikes, new tariffs, and a minimum wage rise that, while well-intended, has mixed consequences depending on which side of the payroll you sit. The economic outlook? Confused, cautious… but not without hope.

The Bank of England has held interest rates steady again — a sensible decision amid conflicting data and global uncertainty. Inflation is cooling, but not fast enough, and while we’re a long way from the panic of rate hikes past, we’re not out of the woods either. The key question now is: when will we see cuts?

Market sentiment suggests we could be in for two or even three rate reductions before the year is out, especially if inflation continues its downward trend and economic momentum stalls. Swap rates remain volatile, reacting to every data release and central bank whisper. These shifts, while modest, show the market’s uncertainty — and its readiness to react to any signal from the BoE or global events.

Despite the choppy outlook, there are clear signs of momentum building in the mortgage market. Lenders are beginning to price in rate cuts and loosen criteria — a strong vote of confidence in the market’s resilience and these moves suggest lenders are feeling more optimistic — and crucially, that they see an opportunity to support borrowers ahead of any monetary policy shifts.

The UK economy is in a tight spot, no doubt. Growth remains sluggish, and while inflation is falling, it’s not yet hitting target. But with fiscal headroom restored and talk of planning reform at the heart of housing policy, there are glimmers of progress. The potential GDP uplift from relaxed planning rules alone could be 0.4% — a vital injection at a time when we need every lever pulled.

We’re also seeing more proactive housing initiatives — such as Skipton’s Home Affordability Index — highlighting where the real work needs to be done to get buyers back on the ladder.

The Bottom Line?

The mortgage market is moving. Slowly, yes. Cautiously, absolutely. But positively. If inflation behaves and the BoE gets the timing right, we could see rate cuts by summer or autumn — giving much-needed breathing space to households and buyers alike.

The property market has real potential. If policymakers, lenders, and brokers work together with vision and patience, we could be on the brink of meaningful, long-term change.

Get in touch with your local Mortgage Consultant at one of Pearsons offices.

Ben Kany

Mortgage and Protection Consultant