To move now or stay put?
Interest rates have been cut by 0.25%, mortgage lending rules are expected to be relaxed, stamp duty is due to be increased. What does this all mean for people looking to move this year?
Interest rates
The Bank of England lowered interest rates from 4.75% to 4.5% on 6th February 2025, a move widely predicted by analysts. The cut in interest rates is welcome news for the housing market as borrowers affordability is boosted and mortgage rates are lowered. We are already experiencing an unusually busy start to the year, and we expect this only to add to the number of people looking to move. This will also be welcome news for first time buyers, as mortgages will be more affordable and counter balance the reduction in stamp duty which comes to an end from 1st April.
Mortgage lending rules to be relaxed
The financial watchdog, the Financial Conduct Authority (FCA), has written an open letter to Kier Starmer, within it they say they will soon grant banks and building societies greater flexibility to allow ‘responsible risk-taking’, especially for mortgage lending and in particular first time buyers. The current rules were instated following the 2008 financial crisis, a review of the balance between protecting borrowers and access to home loans is a move that would be welcomed by lenders.
One of the significant advantages of the rate cut is the potential savings it offers over the life of your mortgage. Even a small percentage decrease in interest rates can translate into substantial savings over the years. By taking advantage of the current market conditions, buyers can potentially save thousands of pounds in interest payments.
Stamp Duty changes
The stamp duty holiday is due to end on 31st March 2025. With some buyers set to save up to £6,250 for completing before this date, our in-house progression team is working tirelessly to push sales through before the deadline. For sellers considering moving now, they have most likely missed the boat for this as it is unlikely they would be able to complete their sale before the end of March. In exceptional circumstances however with cash buyers and chain free transactions we have progressed sales through within 2-6 weeks.
To move now or stay put?
All of these changes are set to impact the property market this year. The interest rate cuts and potential relaxing of mortgage lending rules will enable buyers to make savings on their mortgages, or allow them to afford more expensive properties. Spring is always busy in the housing market as gardens start to come to life again and people want to move over the summer months. Therefore now is a good time to start getting your property market ready ahead of when buyer demand starts to peak and you can generate maximum interest.
