Encouraging signs as mortgage rates fall below 4% and experts react to Halifax HPI with optimism

Positive signs…

Last week there were a number of positive signs for buyers and the property market as a whole. HSBC UK announced cuts which mean that five-year fixed-rate mortgages are available at below 4% for the first time since last year’s mini-budget in September. In addition to this, mortgage experts responded to the Halifax HPI report with optimism. 

First five-year fixed mortgage under 4% since September last year 

The new HSBC UK deal is a reduced five-year fixed-rate mortgage deal for borrowers with a 40% deposit to 3.99%. It will be available to homeowners who are remortgaging or those who are switching rates (with existing customers rolling off an old deal and on to a new one with HSBC UK). The move is part of a wider range of mortgage rate cuts made by the bank last week. 

This marks the first time that five-year fixed-rate mortgages are available at below 4% for the first time since the former Chancellor of the Exchequer, Kwasi Kwarteng, delivered the Ministerial Statement (referred to as the mini-budget) in September of last year. This follows the slow decline on average five-year fixed rates seen this year, with Moneyfacts.co.uk reporting that the average rate on the market was 5.63% at the start of January and then 5.2% at the start of February.

This creates potential opportunities for buyers and reflects a growing optimism for the property market as a whole. As Rachel Springall, spokesperson for Moneyfacts.co.uk, explains; “It’s encouraging to see fixed mortgage rates coming down for borrowers looking to secure a new deal.” David Hollingworth, Associate Director at mortgage broker L&C, shared this optimism, stating “The thought of being able to fix at a rate lower than base rate (at 4%) would have sounded like dreamland in recent months.” 

Analysing the Halifax HPI report 

Equally positive for potential buyers is the analysis that has been conducted after Halifax released its HPI report. 

The Halifax HPI is a property price index that has been providing monthly analysis on UK house prices since January 1983, measuring the market by looking at mortgage offers. Last Tuesday, Halifax revealed its HPI for January 2023. The report shows that Halifax has recorded the lowest level of annual house price growth for three years, with growth slowing from 2.1% in December to 1.9% last month and the average house price now £281,684. A figure that Kim Kinnaird, Director at Halifax Mortgages says is “now around £12,500 below its peak in August last year”. 

IFA magazine has collected reactions to the report as a whole, with various  mortgage brokers and property experts speaking positively about what its findings show for the sector as a whole. Steven Morris, Director at Bristol-based independent mortgage broker, Advantage Financial Solutions, states “though the property market is still under pressure, the fixed rate mortgage price war currently raging and the fact prices were flat in January shows there’s light at the end of the tunnel”. Gary Bush of MortgageShop.com also felt positive about the market as a whole, stating “January was busier than expected, showing signs that the general public has now factored the higher fixed rates into their budgets. We are optimistic that the UK property market in 2023 will represent good value to buyers and be a busy period on the whole”. 



What does this mean for you 

The biggest take-away from this news is that if you are considering buying a new property, don’t make any assumptions about the market and what is and isn’t possible. To avoid potentially losing out on your dream property, the best approach will always be to reach out to an expert and get their view on what your best route may be - call your local Jones Robinson team and we'll offer advice on the market near you and can also refer you to our recommended mortgage provider if you're either remortgaging or buying your first home.

About Jones Robinson...

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