Mortgage Options and Trends in 2024

7th June, 2024

2024 has been and is set to remain a buyer’s market. While the much-anticipated base rate cuts are  yet to be implemented by the Bank of England, mortgage rates remain fairly steady as wages rise. There’s also plenty of property for sale with little competition from other buyers, resulting in more realistic pricing from sellers.

What do Mortgage Rates Look Like at Present?

While the Bank of England’s base rate has remained steady at 5.25% since August 2023, 85% loan-to-value (LTV) two-year fixed mortgage rates fell from an average of 6.35% in August 2023 to 5.03% in January 2024. Since then, rates have remained fairly stable, even dropping to 4.99% in recent months.

How are Mortgage Rates Likely to Change Over the Rest of the Year?

Hopes were high for a cut in base rates this June, but this is now expected to be implemented in August (or potentially even later in the year). However, it’s forecasted that mortgage rates will fall through the rest of 2024, with this trend then continuing over the course of the next five years. Big lenders including HSBC, Barclays and TSB have already started reducing mortgage rates this month, resulting in more generous and competitive deals emerging for movers and first-time buyers.

How Could the General Election Affect Mortgages?

Bringing with it financial and political uncertainty, a general election can cause some short-term fluctuations in the financial market. This uncertain future may result in lenders being more cautious, potentially delaying expected mortgage rate reductions until after the election has concluded. Beyond this, the long-term picture will partially be shaped by the new government’s financial policies.

3 Great Mortgage Options in 2024

The current inflated cost of living can make buying a home feel daunting for first-time buyers and movers alike. And with the general election looming, mortgage rates aren’t likely to reduce drastically in the very near future. The good news is that in 2024, there are some great schemes available to make home ownership more accessible to first-time buyers (and even those moving home).

The following options may make owning a home feel a little more achievable:

  • Mortgage Guarantee Scheme. Great if: You’re a first-time buyer struggling to gather a deposit. Amid a cost-of-living crisis, saving for a deposit while also paying eye-watering rent, utility and food bills can feel like an impossible task. The mortgage guarantee scheme allows first time buyers and movers alike to purchase a home with a more doable 5% deposit, taking out a mortgage on the remaining 95%.
  • Shared Ownership. Great if: You want to get on the property ladder but are on a low income. With shared ownership, you can buy a stake in a property and pay rent on the rest. This stake can be as little as 25%, and you have the option to increase your stake over time. Deposits for shared ownership homes are only paid on the share you’re buying, too, making them much more affordable.
  • Help to Build Scheme. Great if: You want to build your own home. This exciting scheme can make the dream of building your own home a reality. It allows builders to access an equity loan to buy a plot of land for their home. The loan can cover 5%-20% (or even up to 40% in London) of the total estimated cost of your build.7

The Bottom Line

While many lenders are biding their time until next month’s general election, some of the biggest names have started to compete with reduced mortgage rates of late. And with a range of schemes available to get first-time buyers onto the ladder, the chances of achieving home ownership may be steadily heading in the right direction as we move into the second half of 2024.

If you would like further advice on mortgages then please contact our recommended mortgage broker Michelle Niziol on 01869 927101 or email michelle@imspropertygroup.co.uk