Mortgage rates dip – and an update on the property market

MORTGAGE rates have started to come down slightly and The Yorkshire Post mortgage columnist Andrew Milnes of the Mortgage Advice Bureau Bingley says: “We have been advocating for shorter term fixed and tracker deals for a while now given the feeling that rates may fall in late 2024, as the logic is that if you fixed for two years or more now, you may be fixing for too high an interest rate for too long.

“However, Halifax has dropped interest rates to 4.41 per cent from 4.53 per cent on a fiveyear fixed rate at a 60 per cent loan to value with a £999 fee and last week we saw Nationwide launch a 4.43 per cent for loan to value for a mortgage under 60 per cent with a £999 fee and Halifax 4.53 per cent with the same LTV and fee.”

Andrew adds: “If you also factor in that a borrower opting for a two-year fix could face fees each time they take out a new deal, the five year fix is starting to look a little more attractive again.”

In other news, the Government mortgage guarantee scheme, which underwrites mortgages for those with a five per cent deposit, will be extended for a further 18 months.

Over at Zoopla, analysis shows that UK home buyers are securing an average discount of £18,000 as the number of homes for sale in the UK reaches six year high, though this figure is boosted by high value homes in London and the South East. The average discount in the rest of the country is £11,000.

However, despite buyer demand remaining 13 per cent lower than 2019, new sales are still being agreed with the total volume currently 15 per cent higher than this time last year and five per cent up on 2019 levels.

Zoopla says this indicates greater realism on the part of sellers and a growing sense among would-be movers that mortgage rates may have peaked and could start to fall later in 2024.

Zoopla’s house price index for England shows that Yorkshire fared well compared to other regions in October, the latest period where figures available, with just a 0.2 per cent drop in prices beaten only by the North East which had a 0.1 per cent fall. The North West saw a 0.7 per cent slip in values. The highest losses were in the South East with a 4.2 per cent drop and London with a four per cent fall.

London house prices are high but have failed to keep pace with the rest of the UK over the last six years. The average value of a London home is just eight per cent higher than seven years ago while UK house prices are 28 per cent higher.

In good news for buyers, the number of homes available for sale reached a six year high with 34 per cent more homes for sale now compared to a year ago. This means that the average estate agency branch now has over 31 homes for sale, compared to a low of just 14 in the middle of the pandemic boom, offering more choice for potential buyers.

As a result, increased supply boosts choice for buyers but is likely to keep prices under downward pressure as price sensitive buyers continue to negotiate.

Richard Donnell, Executive Director at Zoopla, says: “These are the best conditions for buyers for some years.

“Sellers have plenty of room to negotiate with average house prices still £41,350 higher than the start of the pandemic. It’s a positive sign that new sales continue to be agreed at a faster rate than a year ago and pre-pandemic. This indicates that house prices do not need to post bigger falls to get pe o p le moving bu t sellers need to be ready for negotiation on pr ice.