Good news for anyone considering a mortgage in the UK! Lenders have just announced further reductions in mortgage rates, with even more cuts expected in the coming weeks. This comes as new data reveals that the number of mortgage options for borrowers has reached its highest level since February last year.

Last week, Bank of England governor Andrew Bailey’s comments hinted that the UK might avoid further interest rate hikes. Rightmove’s mortgage commentator Matt Smith added, “There’s a widely held view that the Base Rate is now nearing its peak, which led to a fall in swap rates towards the end of last week. This could mean we see lenders make more significant mortgage rate cuts in the next few weeks.”

According to Rachel Springall, finance commentator at Moneyfacts, “Mortgage product choice has grown to its highest level since February 2022, and average rates are gradually falling. As long as the news is in line with market expectations, it’s possible that rate reductions will start to gather pace, and we could see sub-5% rates return to the market for the first time since the end of June.”

Moneyfacts data suggests that mortgage borrowers now have the greatest choice of home loan products since February 2022, with 5,338 mortgage products on the market as of early September. This is more than double the availability seen in October 2022!

So, what’s driving this positive change? Despite expectations of another interest rate rise from the Bank of England, average rates are still falling. For instance, the average pricing on a two-year fixed rate mortgage dropped from 6.85% to 6.7% between August and September, and from 6.37% to 6.19% on a five-year deal. While these figures are higher than those seen in 2021 and 2022, they indicate a promising shift in the market.

Rachel Springall also pointed out that there’s been notable growth in loan-to-value (LTV) tiers, especially in the 85% LTV tier. This suggests increased stability and choice across the market.

Bank of England data further confirms the positive trend, showing that new mortgage commitments in the second quarter of 2023 were 26.2% greater than the first three months of the year, marking the highest value observed since the third quarter of 2022.

Gareth Lewis, managing director of property lender MT Finance, reassured potential buyers, saying, “While mortgage rates have increased from all-time lows, they are still at affordable levels, although there has been some hesitancy to buy while there is uncertainty around where they might peak. We need stability to allow consumers to gain confidence.”

So, if you’ve been holding off on your mortgage plans due to high rates, this could be the perfect time to explore your options. With a growing number of mortgage products and falling rates, the UK housing market is showing signs of becoming more buyer friendly.

Trinity Property work with local, friendly and experienced Mortgage Brokers who can provide bespoke guidance on mortgages – whether for Homeowners or Investors – please call 01384 213395 or email [email protected] for more information.