UK Housing Market Making Buyers D:Ream

The trend of welcome news for buyers continued with Rightmove suggesting that the average First Time Buyer will pay around £150 per month less on their mortgage than in July 2023.

The average monthly mortgage repayment was revealed to be £949 per month, down from £1,096 at the peak in July 2023, with the reasons being very clear.

Average rates for someone with a 20% deposit sit currently at 4.76%, compared to the same period last year where you could have expected to pay over 6%, and in more expensive areas, the savings are even more stark.

“We’ve seen significant movement in mortgage costs for those buying in London and the South East” adds Olivia. “With the average mortgage balance being significantly higher, the savings are also magnified with even a small difference in interest rate, with some clients more than doubling that monthly saving.”

Perhaps unsurprisingly, along with property transactions rising, mortgage approvals have also risen, with 2.3% more mortgages approved this year than in July 2023. Interestingly, however, remortgage figures are significantly down for the month, with 8% fewer remortgage applications approved than in June.

“On face value it may seem strange that remortgage figures are reducing with the market trend of lenders battling over rate reductions, this is however to be expected while owners weigh up when the time is right to lock into a new deal” continues Harland.

“We are seeing a definite lag in retention rates - those offered by lenders to those looking for a new product - being reduced at the same level as new business products, as lenders appear to be targeting new customers in particular.”

“While the number of property transactions increasing shows that more people are choosing to move than improve, the value simply hasn’t been there yet for many homeowners with low legacy rates coming to an end.”

With higher mortgage balances exacerbating the savings to be found with better rates, the reverse is also true of the potential failure to act when looking at remortgaging.

“While rates on offer for Product Transfers with the same lenders are not particularly attractive currently, there is still huge value to be found in switching lenders and taking advantage of falling rates” concludes Olivia.

“This is where the true value of a mortgage broker is seen, as an analysis of the market will include lenders who may not be open to direct business, or rates on offer from mainstream lenders which are exclusive to certain brokers.”

“At Cleerly, you have the best of both worlds, with all broker friendly lenders able to be used, alongside having access to rates not available on the high street, meaning the best solution for you can be found with no effort on your part.”