London & Country Mortages

Commentators previously anticipated that the base rate could fall as early as June, but higher than expected inflation numbers in the year to March mean that interest rates could stay higher for longer. Prices rose by 3.2% in the year to March, down from 3.4% in February, but higher than the predicted 3.1% . Even though the base rate has remained unchanged at 5.25% over the past few months, fixed mortgage rates are influenced by ‘swap rates’, which are the rates bank pay to borrow from each other.

The UK rate of inflation fell to 3.2% in March, down from 3.4% in February, and reaching its lowest level since September 2021. Although the drop was slightly less than expected, it will still come as welcome news to households, and is predicted to drop further in April as the lower energy price cap takes effect. The Office of National Statistics (ONS) said the biggest contribution to the change in inflation came from food, with prices rising by less than a year ago.

Yorkshire Building Society has launched a new first-time buyer mortgage designed to help those who can only afford to put down a small deposit. The £5k Deposit Mortgage, as the name suggests, requires first-time buyers to put down a minimum deposit of £5,000. They can then borrow as much as 99% of the property value, provided the home they want to buy costs no more than £500,000.

Nearly half of landlords are due to remortgage this year, according to research, with current competitive mortgage rates meaning it could make sense to secure your next deal sooner rather than later. Two-fifths of landlords have mortgages coming up for renewal this year, a survey by The Mortgage Lender found, with a further 41% due to renew their mortgage in the next two to three years.

House prices were down 1% in March compared to February, according to Halifax’s latest House Price Index, the first time they’ve fallen for six months. The bank said that the price of an average property in the UK dropped by £2,908 last month, to £288,430. However, even though property prices dipped on a monthly basis, they were up 0.3% annually in March, compared to 1.6% last month. Over the quarter, property prices grew by 2%.

The MPC first voted to leave the base rate at 5.25% in September last year, and it has remained at this level ever since. There was only one member of the Committee that voted for a cut this month. However, it was the first time that there were no votes for a rate hike since base rate hit the current level last August. Last month two members had preferred to see another increase to rates so this shift suggests that we may be edging closer to the point when rates could fall.

Growing numbers of first time buyers are opting for ‘marathon’ mortgage terms of 35 years or more to help reduce the cost of their monthly payments, despite the fact they could end up paying more overall. By the end of 2023, almost one in five first time buyers were borrowing with a term of over 35 years, according to trade body UK Finance, compared with fewer than one in ten the previous year.

UK house prices rose by 1.2% year on year, according to Nationwide’s February House Price Index, the first time annual growth has been positive since January 2023. The average property price increased by 0.7% in February, the building society said, bringing the price of an average home in the UK to £260,420, up from £257,656 in January. House prices are still around 3% lower than the all-time highs seen in summer 2022 when they reached an average of £273,751.

The property market is enjoying an early Spring bounce according to data from Rightmove, with agreed sales in the first six weeks of the year up 16% compared to the same period last year. The property website’s latest House Price Index shows that average new seller asking prices rose by 0.9% in February, adding an average of £3,091 to prices and bringing the average cost of a home in the UK to £362,839.