The availability of mortgage deals has seen a positive increase, benefiting both first-time buyers and existing homeowners. According to recent data from Moneyfacts, there were 7,132 mortgage deals at the beginning of June, a notable rise from 6,784 in May, marking an increase of nearly 350 deals.
Following uncertainties surrounding UK interest rates and the conflict in the Middle East, many lenders withdrew mortgage deals. However, there has been a positive trend in the number of available low deposit mortgages. In early June, there were 466 deals for borrowers with 5% deposits, compared to 436 in May.
Fixed mortgage rates have also shown a decline, with the average two-year fixed rate dropping to 5.64% from 5.65% and the average five-year fixed rate decreasing to 5.60% from 5.61%. The average standard variable rate has remained at 7.13%, showing a year-on-year decrease of 0.35% from 7.48%.
The average lifespan of a mortgage deal is now 15 days, one day less than the previous month. Rachel Springall, a finance expert at Moneyfacts, mentioned that the product churn has stabilized, bringing relief to borrowers, brokers, and lenders navigating the market for the latest deals.
Emphasizing the significance of supporting first-time buyers in the mortgage market, Springall highlighted the importance of lenders offering packages that help reduce upfront costs for this vital segment of buyers.
Additionally, the Bank of England maintained its base interest rate at 3.75% in its April meeting due to concerns about potential inflation shocks later in the year. UK inflation stood at 2.8% in April, down from 3.3% in March, primarily attributed to a decline in energy prices, although energy bills are expected to rise in July.
Economists anticipate a potential interest rate hike later this year as the Bank of England aims to manage price rises and maintain inflation around the 2% target. Inflation forecasts range between 3.6% and 6.2%, contingent on the severity of the situation in the Middle East.
