Several providers have already dropped mortgage rates in the past day, after the Bank of England opted not to up interest rates, but experts expect rates to become even “more competitive” in order to entice potential house buyers to the market.
It comes as house sales are set to fall to their lowest level in over a decade this year, according to property website Zoopla, as rising mortgage rates created a property market slowdown.
And while lenders are still picking up business from customers who being forced to remortgage because their current deal is ending, they are not picking up as much new business from fresh buyers.
Nick Mendes, mortgage technical manager at John Charcol brokers, told i that with markets having settled and interest rates appearing to be at or close to their peak, the mortgage market was “going to see a very busy second half to the year and early 2024”.
He explained that this week had been full of good news including lower than expected inflation figures and a Bank of England base rate hold, and that he expected a “positive Monday” with more rate falls next week.
“I would not be surprised to see rates of 4.5 per cent for five-year fixes in October.”
David Hollingworth, of brokers L&C, added: “After the false start of rates falling back in the early part of 2023 borrowers may now be able to look ahead with some more confidence. We’ve already seen improvements in fixed rates and that looks set to continue or even accelerate in light of improved inflation figures and a hold in interest rates.”