As rates ease, fresh opportunities emerge for buyers and sellers.
Just before the COVID-19 pandemic hit, the UK base rate stood at 0.75% – already historically low. In response to the unfolding crisis, the Bank of England took swift action, slashing the rate to just 0.10% in March 2020, the lowest in its 325-year history. This led to a highly favourable borrowing environment, with average new mortgage rates falling to around 1.81%. These ultra-low rates opened up excellent opportunities for both homebuyers and those looking to refinance, fuelling a surprisingly buoyant property market during uncertain times.
Since then, global inflationary pressures have pushed interest rates higher. At their peak in 2023, the Bank of England base rate reached 5.25%, driving average mortgage rates above 6% for many borrowers.
This understandably created headwinds for some buyers and sellers, but the market remained resilient. Activity continued, with motivated movers and investors adapting quickly, supported by strong demand and a robust rental sector.
Looking ahead, the outlook is once again encouraging. With inflation showing signs of easing and the economy stabilising, many analysts forecast that the base rate could gradually reduce over the coming months and years. While a return to the pandemic-era lows of 0.10% is unlikely, rates around 3%–3.5% are within reach – and mortgage rates could follow suit, potentially dropping back to the 3%–4% range. For buyers, this means more affordable monthly repayments; for sellers, greater confidence and increased demand.
With lenders competing for business and a broad range of products available, it’s a positive time to be considering a move or remortgage.
The market remains full of opportunity – and a rate-friendly environment is well within sight.
