Brits snap up lower mortgage deals as Bank of England rate cut boosts property market
LONDON — Britain's biggest high street lenders are continuing to slash borrowing costs after the Bank of England's first interest rate cut in four years sparked a boom in homebuyer activity.
Barclays, Halifax, HSBC and NatWest are among the lenders now offering five-year fixed-rate mortgages of under 4%, below the BOE's 5% key rate.
The best five-year fixed rate is currently 3.83% for buyers with a 40% deposit, according to a new report from property portal Rightmove. This marks the lowest level for such a product since before the U.K.'s disastrous mini-budget in September 2022.
It follows a prior easing of tracker rates, which fell in line with the bank's 25 basis point rate reduction earlier this month.
The improving economic environment, as well as the political certainty gained from the U.K.'s July general election, has led to an "immediate upturn," in buyer activity, Rightmove found.
The number of house hunters contacting estate agents for viewings is up 19% versus a year ago following the BOE's Aug. 1 decision, the property portal said in its report, adding that this is a marked hike from the 11% annual increase recorded in July.
The number of new sellers coming to market also rose 5% this month compared with the previous year. The number of sales being agreed, meanwhile, is 16% ahead of the near-peak mortgage rate period of a year ago.
Tim Bannister, Rightmove's director of property science, said that, while minimal, the rate cut had brought some relief to struggling homebuyers, adding that he expects activity to pick up further through the autumn.
"While mortgage rates aren't yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading