If you’re thinking of buying or moving this autumn, September’s property news probably sent mixed signals. Rightmove reports the highest number of homes on the market for this time of year in 12 years, but several large lenders raised their mortgage rates in the same month.
What is happening
Rightmove’s September figures show asking prices for newly listed homes rose 0.7% to an average of £367,440, the first rise since May. They’re still 0.8% lower than a year ago, though, and buyer enquiries are down 9%. Sellers face plenty of competition, and buyers have more choice than they’ve had for some time.
Borrowing is heading the other way. In its September report, Rightmove put the average two-year fixed rate at 5.29%, up from 5.09% a month earlier and 4.25% before the war in Iran began at the end of February. Fixed rates follow what lenders pay to borrow in financial markets, which reflects expectations for future interest rates and uncertainty, so they can rise even when the Bank of England’s own rate, which has been 3.75% since December, stays put.
Where we would focus
You can’t control the rate market, but two things are within your reach.
Price
With this much choice, the asking price is a starting point, and homes that have been listed for a while, or look ambitious on price, are where negotiation tends to work best. A lower price means you borrow less from day one, so in a buyer-friendly market it can matter more than a slightly cheaper rate. Whatever the rate, compare monthly repayments, fees and total cost over the deal.
Locking in your rate
Depending on the lender, you may be able to reserve a rate when you apply and can switch to a cheaper product from the same lender if rates fall before completion. The detail varies by lender, which is where good advice earns its keep.
A balanced view
None of this means prices are about to fall, or that rates will come down soon. Rightmove describes September’s price rise as a modest recovery rather than a turning point, and the picture differs sharply by area: it found 91% of homes for sale in Scotland are finding a buyer, against 42% in London. Your own local market matters more than any national average.
A well-prepared buyer is in a stronger position in most markets. Knowing what you can comfortably borrow, and having an agreement in principle (a lender’s early indication of what it would lend) in hand, lets you move quickly on the right home and make a confident offer.
Talk to us
At Cedar House we arrange mortgages for first-time buyers, home movers, landlords and those remortgaging. If you’re weighing up a purchase this autumn, we’d be glad to talk through what you could comfortably borrow and how to approach an offer. Call 020 8366 4400 or email enquiries@cedarhfs.co.uk.