Nothing but good news for the housing market this week!
Mortgage rates are down and house prices are up ... what more could we want to end the year.
Here, James King, Managing Director of Mortgage Broker MAB Kent gives us an update.
House Prices are on the Up!
UK house prices rose for the third month in a row in November, lifting 0.2% to an average of £258,557 compared to the previous month, according to the Nationwide House Price Index.
Annual growth “remains weak” with prices 2% lower than a year ago, the report adds, but it points out that this figure is up from a 3.3% fall in October, making last month’s rise the strongest since February.
Nationwide chief economist Robert Gardner says: “There has been a significant change in market expectations for the future path of the Bank of England base rate in recent months which, if sustained, could provide much-needed support for housing market activity.
“In mid-August, investors had expected the Bank of England to raise rates to a peak of around 6% and lower them only modestly (to around 4%) over the next five years.
“By the end of November, this had shifted to a view that rates have now peaked (at 5.25%) and that they will be lowered to around 3.5% in the years ahead.”
Gardner adds: “These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed-rate mortgage pricing.
Mortgage Interest Rates Tumbling!
As a result of the above, many lenders have made further residential rate cuts in the last week, which sees the market leading five-year fixed-rate deal reduced by 39 basis points to 4.39%.
The head of product pricing for one of the UK’s biggest lenders said: “The market is moving at a fast pace and we are committed to remaining nimble with our pricing to ensure we continue to provide would-be homebuyers with our most competitive offering.
“With this in mind, we are pleased to confirm we are again reducing rates on a selection of our two- and five-year fixed-rate residential purchase-only products.”
James King, director of Kent based mortgage broker MAB Kent adds: “Nationwide were leading the best buys at the start of the week, only to be subtly edged by Virgin’s purchase exclusive five-year fix at 4.42%.
“Now most lenders have repriced and it's a fight to see who will be the top of the best buys ... I expect we will see lenders reprice to really kick off the festive season in style.”
If you’re looking for mortgage advice in Gravesham our in house mortgage broker works for the Mortgage Advice Bureau and can meet with you in our office or have a chat over the phone.
Don't hesitate, contact the office ... we are here and ready to help in whatever way we can.
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