Mortgage Rates Drop Below 5% – What This Means for the UK Housing Market

For the first time since September 2022, the average two-year mortgage rate in the UK has fallen below 5%, now standing at 4.99%. This milestone is a welcome boost for both buyers and sellers, signalling more competitive lending and a shift in the property market.

Mortgage Rates in the UK – The Latest Update

After the market turmoil caused by the 2022 mini-budget, mortgage rates soared to nearly 7% in 2023. Now, lenders are competing aggressively, with some deals as low as 3.7%. This is giving UK homebuyers an opportunity to secure better repayment terms and improve affordability.

Key highlights:

-900,000 fixed-rate deals set to expire in the second half of 2025.
-Two-year fixed mortgage rates now at 4.99%.
-Most competitive rates as low as 3.7%.

Why This Matters for UK Homebuyers

Lower mortgage rates can:

• Reduce monthly repayments – freeing up your budget.
  
• Increase your purchasing power – allowing you to consider more desirable homes.
  
• Encourage more market activity – which could lead to higher competition.
  

If you’re a first-time buyer in the UK, securing a mortgage now could help you get ahead of the curve before rates or prices shift again.

Impact on UK Home Sellers

With cheaper mortgage deals, buyer demand is likely to grow. Halifax reports that average UK house prices rose by over £1,000 in July, suggesting the market remains resilient. If you’re thinking of selling, this could be the right moment to list your property.

Act Before Competition Rises

Experts suggest rates are unlikely to drop significantly in the short term. With many homeowners set to remortgage in 2025, demand could rise quickly. Acting now could help you secure a better deal before competition intensifies.

Curious about your home’s current value in this active market?
https://crrealestate.co.uk/online-valuation/

For sales, lettings, or investment advice, contact CR Real Estate today:
01634 570057 🌐 https://crrealestate.co.uk/

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