Britons snap up cheap mortgages as BoE rate cut boosts market

LONDON — Britain’s biggest high street lender is continuing to cut borrowing costs following the Bank of England’s first interest rate cut. Rate cuts That sparked a four-year boom in home buying activity.

BarclaysHalifax, HSBC and National Westminster Bank It is one of the lenders currently offering five-year fixed-rate mortgages at an interest rate of less than 4%, below the Bank of England’s base rate of 5%.

according to New Report According to property portal Rightmove, this is the lowest level of such products since the catastrophic financial crisis in the UK. Mini Budget September 2022.

It follows from the previous Relaxation of tracking rateThis is in line with the central bank’s 25 basis point cut earlier this month.

Rightmove found that an improving economic climate 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 its report that after the Bank of England made its decision on August 1, the number of homebuyers contacting real estate agents to make appointments to view properties increased by 19% compared with the same period last year, and was a significant increase from the 11% annual growth rate in July.

The number of new sellers entering the market this month is also 5% higher than a year ago. Meanwhile, the number of completed sales is 16% higher than a year ago, when mortgage rates were near their peak.

Tim Bannister, director of property science at Rightmove, said that although the rate cut was small, it provided some relief to struggling homebuyers, adding that he expected activity to pick up further in the autumn.

“While mortgage rates have not yet fallen significantly since the rate cuts, the long-awaited first rate cut has finally arrived and mortgage rates are falling, which is positive for homebuyer sentiment,” he said in the report.

Rightmove now expects new seller asking prices to rise slightly by 1% in 2024, which is higher than its previous forecast of a 1% fall in prices.

The Bank of England will meet on September 19 to make a new interest rate decision. According to data from the London Stock Exchange, the market currently expects a rate cut in September at a 37% chance, while expectations for November have risen to 74%.

Peter Gettins, product manager at L&C Mortgages, said many buyers would be watching the outcome of the meeting closely to see where mortgage rates were headed in the future.

“Many may be inclined to wait and see whether interest rates fall further. If the benchmark rate is lowered again in the coming months, we would expect confidence to strengthen further,” he told CNBC via email.