Lower mortgage rates boost buyer demand, accelerating sales and prices.
The Bank of England’s recent 0.25% reduction in the base rate to 4.5% has prompted several major lenders, including Barclays, Nationwide Building Society, Halifax, and Skipton Building Society, to lower their mortgage rates.
Lower mortgage rates improve affordability for prospective buyers, as reduced borrowing costs lead to more manageable monthly payments. This increased affordability expands the pool of potential purchasers, driving up demand for properties. For sellers, greater demand often results in faster sales and the potential for higher sale prices. As more buyers enter the market, competition for available homes intensifies, giving sellers stronger negotiating power.
The rise in buyer interest is reflected in recent market activity. Property sales have surged, with a 15% increase in home sales and a 13% rise in new property listings recorded in January. This momentum is partly fuelled by buyers rushing to complete transactions before upcoming stamp duty changes, further stimulating the market.
Lenders such as Halifax have reduced certain mortgage rates for homemovers, first-time buyers, and those remortgaging by around 0.2%. Santander UK has also lowered its residential mortgage affordability rates, increasing borrowing capacity for customers.
Overall, the recent mortgage rate reductions have boosted buyer interest, making the market more dynamic and competitive. For sellers, this presents an opportunity for quicker sales and potentially higher returns, making it an ideal time to enter the property market.
