Homebuyers are set to act fast amid a New Year mortgage price war that could bring rates down before the stamp duty holiday ends after Christmas. A rush of activity is expected in January as buyers look to beat the deadline and sellers put their homes on the market after a quiet December.
Andrew Montlake from the mortgage broker Coreco told the Times newspaper ahead of the stamp duty shake up in 12 weeks: “Lenders are relatively bullish about the new year. The first three months could be dominated by the rush to buy property before the stamp duty changes and banks will be seeing if they can produce some enticing winter-warmer rates to get things off to a good start.”
Looking ahead, he said: “I think we will see a return of five-year fixes starting with a 3 by the end of the year, but overall mortgage rates will fall slowly rather than any dramatic drops.” Chris Sykes from the mortgage broker Private Finance said: “Lenders often come out quite strong at the start of the year. I’ve heard that there are some ambitious sales targets floating around for next year with some banks looking to grow their market share, which could make things interesting.”
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Aneisha Beveridge, head of research at the property company Hamptons, said: “As the end of 2024 approaches, the mood of the housing market has shifted from trepidation to cautious optimism. Lower mortgage rates have been the principal catalyst for change, falling much more rapidly than we had expected.
“House prices are moving upwards, reversing the declines of 2023. Yet, while the future direction of interest rates seems to have been mapped out, the pace of this journey and its ultimate destination remain uncertain.” Tim Bannister, a property expert at Rightmove, said this would be “driven partly by some major companies mandating a return to permanent office working.
“We think 2025 will continue to be a buyer’s market, which could provide buyers with more negotiating power, given the number of available properties per estate agent is at a decade-high for this time of year. There’s less competition amongst buyers than during the pandemic markets, which could provide them with some breathing room to choose the right home at the right price.”