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Good news for buyers: Mortgage Rate drops from 6.5%+ to 4.99% & Stamp Duty cuts to stay

mortgage rate

The UK has had a turbulent few months, with Prime Minister changes, budget modifications, and an uncertain financial market. We’re here to compress it for you so you’re up to date without having to read many articles!

Mortgage rates have begun to fall following the recent rise following ex-Chancellor Kwarteng’s mini-budget statement at the end of September, which led the UK economic plummet. Fixed mortgage rates peaked at 6.65% for a two-year fix, but mortgage options may currently be available with rates as low as 4.99%. It continues to show symptoms of further decline, with many analysts forecasting that it will go below 4% in the new year. Platform, Yorkshire Building Society, HSBC, Halifax, Lloyds, and NatWest have all cut their fixed rates in the previous week.One explanation for this is that gilt yields, which determine the cost of government borrowing and influence mortgage rates, have returned to pre-mini-Budget levels. As a result, despite the recent hysteria in the financial and real estate markets, there is no cause to be concerned or make any hasty judgments. Mortgage rates have dropped, which is great news for both potential and present UK property investors. It demonstrates that the market is recovering from the recent crisis, as many financial experts expected.

The fact that interest rates did not remain high for long demonstrates the robustness of the UK economy, since even when it is badly damaged, it always rebounds in the long term. Small collapses or market knocks like these will not harm your investment if you invest long-term; time is the most powerful asset in real estate. When it comes to real property, everyone should look long term.

The UK government issued its winter statement on November 17th, outlining the expected effect of tax, welfare, and public service expenditure choices over the coming years. One of the most notable property-related statements was that the stamp duty decreases announced in the September mini-budget will be maintained until at least March 2025. The stamp duty payment threshold will be reduced from £250,000 to £125,000 beginning in March 2025.

This is fantastic news for any potential investor/landlord who have been debating whether to buy, since it means they will pay less or no Stamp Duty Land Tax  when purchasing a property for the next two and a half years.
If you are in the market for a home, this is a terrific chance for you to get the most out of your investment. This means that you will benefit from the stamp duty reductions once your house is completed, which is especially important if you are purchasing off-plan. This is all assuming the property does not finish after March 2025; however, all of the alternatives we have complete before Q4 2024.

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