As 2024 draws to a close, we take a look at the key trends shaping the UK mortgage market. This year brought challenges for homebuyers and homeowners alike but also signs of resilience.

Rising Interest Rates

The Bank of England’s base rate reached 5.25% by mid-year, pushing mortgage rates higher, with fixed deals averaging around 6%. We’ve seen slight rate reductions, offering hope to borrowers, along with news yesterday that the Bank Of England is holding the base rate at 4.75%. Watch our blog in the new year for more base rate updates.

Challenges for Buyers and Homeowners

First-time buyers faced affordability issues, while existing homeowners coming off fixed-rate deals saw higher monthly payments. Many chose 2 year fixed term rates in order to review the markets again in the hope that rates will have reduced.

House Prices Cool

House prices dipped by 2-3% in 2024 due to reduced buyer demand, providing relief to some buyers but challenges for sellers seeking top value.

Innovations in Mortgages

Lenders introduced longer-term fixed-rate options and targeted schemes for first-time buyers. The government extended the Mortgage Guarantee Scheme, supporting low-deposit buyers.

The 2025 Forecast

Economists predict possible base rate reductions in 2025, potentially lowering mortgage costs. Stay informed by watching our Instagram and Facebook channels to find out the latest news.

2024 brought significant shifts to the UK mortgage market, but adaptability remained key. With cautious optimism for 2025, borrowers can look forward to improved affordability and stability.

Bee Financial wishes you a very Merry Christmas and a prosperous 2025.

Annabelle Bezant, December 2024