UK mortgage rates have eased, coinciding with a rise in property prices, according to property website Rightmove. In May, asking prices for homes across Britain rose by 1.2 per cent, surpassing the typical 1.0 per cent increase expected for this time of year.
Mortgage rates: Steady Activity Amid Economic Concerns
Despite ongoing global uncertainties, including the situation in Iran, the housing market remains relatively steady. Colleen Babcock, a property expert at Rightmove, noted, “What’s notable this month is that activity in the market is staying fairly steady, even with ongoing cost-of-living pressures and wider global uncertainty.”
Annual Comparisons and Current Trends
The latest data reveals that asking prices are currently 0.3 per cent lower than they were a year earlier, but the monthly rise indicates a potential stabilisation in the market. In April, prices had increased by 0.8 per cent from March, reflecting a gradual upward trend.
Mortgage Rate Changes
On May 11, the average two-year fixed mortgage interest rate fell to 5.18 per cent, down from 5.42 per cent the previous month. This decrease in mortgage rates may contribute to the positive momentum in the housing market.
Impact on First-Time Buyers
For first-time buyers, the situation seems to be improving as price falls in annual terms have eased some affordability issues, particularly in London and the southeast of England. The current landscape might provide a more favourable environment for those looking to enter the property market.
Market Inventory and Sales Performance
Additionally, the number of homes available for sale has reached an 11-year high. However, sales agreed remain 4 per cent lower than a year earlier, yet they are 2 per cent higher compared to the same period in 2024, suggesting a complex dynamic in buyer behaviour.
