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LONDON – Britain's largest high street banks continue to cut borrowing costs after the Bank of England cut interest rates for the first time in four years, triggering a surge of activity among homebuyers.
Barclays, Halifax, HSBC and nativ westminster bank is one of the lenders currently offering five-year fixed-rate mortgages at less than 4%, below the Bank of England's key rate of 5%.
According to one bank, the best five-year fixed rate currently for buyers with a 40% deposit is 3.83%. new report From real estate portal Rightmove. This marks the lowest level of its kind since the introduction of the UK's catastrophic mini-budget in September 2022.
The move comes after the trailing rate was eased, in line with the central bank's 25 basis point cut earlier this month.
Rightmove found that improving economic conditions and the political certainty brought about by the UK's July general election led to an “immediate upturn” in buyer activity.
The portal said in the report that following the Bank of England's decision on August 1, the number of homebuyers contacting estate agents to view properties was 19% higher than a year ago, adding that this was up from 11% recorded in July. % annual growth rate increased significantly.
The number of new sellers entering the market this month also increased by 5% compared with the same period last year. At the same time, the number of sales being agreed is 16% higher than a year ago when mortgage rates were near their peak.
Tim Bannister, director of property science at Rightmove, said the rate cut, while small, had brought some relief to struggling homebuyers, adding that he expected a further pick-up in activity throughout the autumn.
“While mortgage rates have not fallen significantly since the rate cut, the long-awaited first rate cut has finally arrived and mortgage rates are falling, which is positive for mover sentiment,” he said in the report.
Rightmove now expects new seller asking prices to rise slightly by 1% in 2024, up from its previous prediction of a 1% price fall.
The Bank of England will meet on September 19 to make a new interest rate decision. According to LSEG data, the market currently expects the probability of a rate cut in September to be about 37%, with expectations for November rising to 74%.