As mortgage rates continue to fall, new data from Rightmove’s mortgage tracker report shows a significant improvement in affordability for buyers, particularly first-time homeowners. Average mortgage rates for both two and five-year fixed deals have dropped compared to last year, providing much-needed relief for those looking to step onto the property ladder. Propertymark has welcomed this development, highlighting the positive impact on homebuyers and calling for further government action to maintain momentum in the housing market.
Mortgage rates see a steady decline
Rightmove’s latest report reveals that the average rate for a five-year fixed mortgage now stands at 4.64%, down from 5.39% a year ago, while the average two-year fixed rate has also dropped to 4.94%, compared to 5.85% last year. This downward trend extends across various loan-to-value (LTV) brackets, with the most significant improvements seen in the 60% LTV range, where five-year fixed rates have decreased from 4.95% to 4.05%.
This decline in rates has translated into lower monthly mortgage payments for first-time buyers. The average monthly payment for a typical first-time buyer property, priced at £226,868, is now £1,088—down from £1,167 last year.
Propertymark calls for further government support
Toby Leek, President of the National Association of Estate Agents (NAEA) Propertymark, commented on the report, saying, “It’s positive to see that the average rates on many mortgage deals have dropped since last year, evidently providing many buyers and those looking to step onto the property ladder for the first time with increased affordability.”
Leek also urged the government to capitalise on this opportunity by implementing additional measures in the upcoming Autumn Budget to further assist buyers. “We now hope that the UK Government takes the opportunity in its upcoming Autumn Budget to further help buyers and continue the positive momentum within the market as it plays a crucial factor in the overall health of the wider economy,” he added.
Homebuyers cautiously optimistic
While the drop in mortgage rates is a welcome relief, homebuyers remain cautious about future changes. The Bank of England is expected to make a significant announcement regarding interest rates next week, which could further influence the affordability of mortgage deals. A continued decrease in interest rates could help more people access better mortgage terms, easing pressure on those looking to buy.
First-time buyer, Sarah, 28, from Manchester, shared her optimism: “We’ve been waiting for rates to drop, and it’s finally happened. It’s made a massive difference to our budget, and we’re feeling much more confident about getting on the property ladder now.”
A hopeful outlook for the UK housing market
With mortgage rates steadily falling and calls for further government action in the upcoming Budget, the UK housing market is showing signs of recovery. For landlords, property investors, and homebuyers alike, these developments suggest a more accessible and stable housing environment in the coming months.
As Leek noted, the affordability of mortgages is crucial not only for individual buyers but also for the broader economy. It remains to be seen how the government and financial institutions will continue to respond to these positive shifts, but for now, the outlook is encouraging for those entering the property market.
