This year’s autumn housing market kicked off earlier than traditionally expected, driven by increased borrowing power and renewed confidence after the Bank of England cut the base rate from 5.25% to 5% in August.

Many buyers who had delayed their property plans in 2023, waiting for improved market conditions, appeared eager to seize the window of opportunity presented by lower mortgage rates and a larger supply of quality homes.

Positive signs of growing market momentum are emerging. Recent Bank of England data shows that lenders had approved the highest number of mortgages for house purchases in August since two years ago. Nationwide reported that September saw the fastest annual house price growth in two years, rising from 2.4% in August to 3.2%. Rightmove also revealed that new sales agreed were up 27% year-on-year at the start of autumn. Additionally, new property listings rose by 14%, and the average number of available homes per estate agent reached its highest level since 2014 – signalling a shift from the sluggish 2023 market.

September brought renewed optimism to the mortgage market with more competitive rates on offer, including the much-anticipated return of sub-4% 2-year fixed-rate mortgages. Hopes for an additional interest rate cut in 2024 are further boosting confidence. However, with the October budget approaching and concerns arising over potential future tax increases, some buyers are proceeding with caution. All eyes are on the Autumn Statement on October 30th for any significant housing market announcements.

Positive developments for first-time buyers

A promising trend for first-time buyers is that lenders are increasingly willing to raise their maximum loan-to-income (LTI) ratios. This shift could help more first-time buyers secure the financing they need by being able to borrow more with the same income, as long as they meet the lender’s criteria. With current mortgage rates remaining relatively low, prospective buyers may find this a valuable window of opportunity to obtain the necessary financing.

Navigating the Last Quarter of 2024

Despite the uncertainty surrounding the Bank’s interest rate decision in November and the upcoming budget, lenders have continued to act competitively, offering lower rates and innovative products to support borrowers. Some of these rates are exceptionally competitive—perhaps even too competitive—and may be short-lived due to tight profit margins in the current market.

Given the risks the budget presents and these potentially easing rate reductions, or even reversing them slightly, securing the right deal now could be a wise decision, especially as borrowers can lock in a mortgage rate and reassess their options closer to the completion of the mortgage. Generally, mortgage offers are valid for six months and can be renegotiated during this time if rate conditions improve. Our mortgage consultants endeavour to monitor rate movements and identify if a better solution becomes available for you.

Lenders are expected to maintain this competitive behaviour through to the end of the year to meet lending targets, although this may be subject to announcements in the October budget and inflation data. As we move into 2025, this drive amongst lenders to price competitively may taper off as targets reset and market conditions evolve.

If you are looking to buy or remortgage this autumn, it is always best to seek professional mortgage advice as early as possiblePlease reach out to our team on 0800 980 8777 or email info@privatefinance.co.uk. You can also book a time with one of our mortgage experts here.

Your home may be repossessed if you do not keep up repayments on your mortgage. Private Finance is not a tax advisor and this article does not constitute tax advice.

We strongly recommend that you seek tax advice from a relevant professional where required. Should you wish to be introduced to a specialist in this area, please let us know.

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