Only once in the past five years have purchasers faced less competition.

Conditions in the UK property market were sluggish through spring as the uncertain economic outlook halted falls in mortgage rates.

House prices are holding steady, but measures of demand have weakened, according to the latest survey from the Royal Institution of Chartered Surveyors. The Bank of England’s decision to hold the base rate at 5.25% on June 20th will add little urgency to the market, particularly while an election campaign is underway.

These conditions present opportunities for purchasers that have the financing in place to act quickly. The number of homes for sale is rising, and there were nearly 6 new prospective buyers for every sales instruction in the UK in May, Knight Frank data shows. Buyers have only faced less competition once during the last five years: two months after the mini-Budget in December 2022.

A window of opportunity

This window of opportunity will begin to close when the Bank of England’s first rate cut in more than four years comes into view. Most economists in a June survey by Reuters expect two rate cuts before the end of the year, with the first possible by August. Among the Bank’s primary concerns is the rising price of services. The UK’s annual rate of inflation dipped to the 2% target durnig the year to May, but the cost of services surged at a rate of 5.7%, barely dipping from the 5.9% the previous month.

Mortgage rates are unlikely to fall meaingfully until these figures improve, but the past three years have been a lesson in how quickly conditions can change when the inflation narrative shifts. Market leading two and five-year fixed rate mortgages at 75% loan-to-value sit at about 4.84% and 4.50% respectively.

Borrowers that engage with a mortgage broker early could save substantial sums. When volatility rises, as it will when conditions shift, the lenders make regular changes to their product line-ups in order to build a healthy loan book without being overwhelmed. It is virtually impossible for consumers to keep track of these changes without assistance from a mortgage boker that covers the entire market. At times, even mortgage brokers are given less than 24 hours notice before products are pulled.

With that in mind, we recommend that borrower secure a mortgage rate as early as possible. Offers are generally valid for six months and can be renegotiated should better rates become available.

If you would like to understand your borrowing options or are approaching a remortgage and would like some advice, book a no-obligation consultation with one of our advisors. We have access to over 200 lenders, and can help find the right solution for you.