In a recent financial turn, Preston and Chorley residents are experiencing a wave of relief as mortgage rates across the UK take a surprising dip. This reduction, led by major lenders, signals a potential opportunity for the local housing market, directly affecting homeowners, landlords and first-time buyers.
Leading the charge, Halifax announced on the 2nd of January a significant 0.83% cut in its re-mortgage deals, a move promptly followed by other financial institutions.
These cuts are not just numbers; they translate to substantial monthly savings for homeowners. For instance, on a £200,000 mortgage, this reduction could mean savings of £138 per month. As these lower rates become the new norm, they herald a brighter outlook for those looking to re-mortgage or enter the housing market.
For homeowners eyeing the market, this is a particularly opportune moment. The lowered rates could make transitioning to a new home more feasible, easing the financial burden often accompanying such a move.
The trend of falling rates is expected to continue, fuelled by competitive market dynamics and a general anticipation of further interest rate cuts by the Bank of England. Financial experts are betting on a substantial drop in Bank of England base interest rates throughout 2024, with the money markets believing base rates will slowly reduce in small steps from the current 15-year peak of 5.25% down to 3.75% by the year’s end, making mortgages more affordable and possibly boosting the property market’s health.
However, amidst the optimism, homeowners must adopt a tempered view. While the cuts are substantial, the rates are still relatively high compared to the historically low rates in previous years. Homeowners looking to sell should be particularly mindful of this. Setting realistic pricing, reflective of the current economic conditions and buyer capabilities, will be crucial to successful transactions.