UK Property Market Rate Bump, But For How Long?

According to a recent report by Forbes UK, mortgage rates have seen a significant drop, with the average cost of a 2-year fixed rate deal now at 4.94% and the average cost of a 5-year fix at 4.58%. These rates compare favorably to the highs of over 6.50% seen just a few months ago in October.

This drop in mortgage #rates has been welcomed by the UK #propertymarket, with many experts suggesting that it could lead to a boost in the market. For #investors, lower #mortgagerates mean lower monthly repayments, making it easier for them to afford a home. Additionally, the lower rates may encourage more people to enter the property market, increasing demand and potentially providing immediate appreciation.

The Forbes report also highlights that the best rates available for a 2-year fix and 5-year fix are 4.23% and 4.16% respectively. This is good news for those looking for a competitive #mortgage deal. Though, it's yet to be seen how this may affect SPV mortgages at this time.

In terms of the wider market, there are currently around 4,000 residential mortgage deals available, an increase from the 2,560 seen last autumn. However, it is still a far cry from the 5,300+ deals that were available in December 2021 before #interestrates started their steep incline.

The current political landscape, combined with a slight decrease in the annual #inflationrate to 10.5%, could lead to the Bank of England easing pressure to raise interest rates further in 2023. The next decision on interest rates by the Bank's Monetary Policy Committee is scheduled for February 2nd, 2023.

In conclusion, the drop in mortgage rates is a positive development for the UK property market but will require #propertyinvestors interested in the UK market to consider some important variables.

If mortgage rates continue to fall, this will likely see increased demand as buyers return to the UK property market, meaning investors do need to consider if this is the bottom on #houseprices.

However, this may also cause investors to consider if this same change may also see a reduction in renters as these individuals move away from renting into buying, seeing a decrease in possible rents.

Plenty to consider, but as many stock investors who are long will agree, time in the market, is better than timing the market.

Sources:

https://www.forbes.com/uk/advisor/mortgages/mortgage-rates-04-02-23 https://moneyfacts.co.uk/mortgages/fixed-rate-mortgages

#realEstate #invest #indigo1