A likely run of rate cuts, increased competition among lenders, and stable house prices are combining to lift sentiment – here's what it means for buyers and homeowners.

Falling mortgage rates are lifting confidence in the UK housing market, even as the broader economic outlook remains uncertain. Most banks now offer fixed-rate deals below 4%, and there’s a strong chance those rates will edge even lower as we move through the year.

The Bank of England cut its base rate by 0.25 percentage points to 4.25% on Thursday. The decision – and the supporting comments from the Monetary Policy Committee – suggests policymakers are comfortable continuing down this path. Inflation may tick higher in the third quarter, but the Bank sees that as a short-term issue. For now, trade-related global risks are a bigger worry, and the Bank appears willing to cut again if needed.

Things changed quickly after US President Donald Trump announced new tariffs on "Liberation Day" on April 2nd. Policymakers believe the tariffs present a threat to growth, and economies are likely to need support in the form of lower interest rates. Morgan Stanley now expects the Bank to reduce the base rate at each of its next four meetings, potentially bringing it down to 3.25% by year-end.

This shift has triggered a flurry of activity among major UK mortgage lenders. With competition intensifying, the big banks are slashing rates and offering deals at very tight profit margins to attract new customers.

This has underpinned resilience in the UK property market. UK house prices rose 0.3% in April, up from a 0.5% decline in March, Halifax reported a few hours before the Bank's decision. The annual growth rate also ticked up to 3.2%, reaching its highest level so far this year.

All this is welcome news for buyers and homeowners. Whether you're looking to move or remortgage, rates are now much lower than they seemed likely to be just a few weeks ago. That said, the outlook is changing fast – so it’s worth locking in a rate sooner rather than later. Most deals can be updated within six months if better offers emerge.

If you are considering purchasing or remortgaging a home, get in touch with one of our experienced brokers. We have relationships with over 200 lenders and we’d be happy to walk you through your options.