UK mortgage market update, march 2024
March 27, 2024
What’s going on in the UK mortgage market at the moment? Here’s a quick summary on what to expect if you’re looking for a mortgage for a UK buy-to-let property in March 2024.
What are UK mortgage rates doing in March 2024?
Two things are positively impacting mortgage rates this month:
A continued decline in 5–year swap rates. This matters because swap rates underpin fixed price deals and they’ve been declining since December 2023, a steady fall that has been hastened by the market’s positive response to the Spring Budget this month.
Meanwhile in the variable market, lenders reacted positively to the Bank of England’s decision to keep the base rate at 5.25%, a sign that rates are now becoming more predictable. One broker said, “There is no reason we shouldn’t see the best five-year deals back at 4% based on current pricing in the not-too-distant future.” Natwest was the first to respond, cutting its 5-year fix to 4.2% based on a 60% LTV. At the time of writing several lenders were offering 5-year fixes sub 4.5%.
Buying now thought cheaper than renting
Data released by the ONS last week announced a record yearly rent rise – 9% in the 12 months to February this year meaning it now looks likely to be cheaper to buy than rent. The news will no doubt encourage more buyers onto the market unleashing a new wave of competition in the mortgage markets, looking to tempt customers with lower rates; all this despite the fact that UK house prices are still 20% higher than at the end of 2019 (Nationwide).
Lowering inflation likely to lead to house price rises – the advice buy now rather than wait
With the news that inflation fell to 3.4% in February - lower than expected - speculation is rife over whether The Bank of England will cut rates at their next meeting on 9 May. We’ve come a long way since its peak in October 2022 at 11.1%.
If you’re currently looking at purchasing a UK investment property, you could well find that the deals have reduced further by the time you come to arrange your mortgage in the next few months. We’re urging our clients not to delay and wait and see, but kick start the process before UK house prices start to rise again, inevitably increasing the size of your loan and/or LTV. Read more about anticipated house price rises here.
What are the best current buy-to-let mortgages?
The buy-to-let mortgage market, particularly for overseas landlords is also looking much more attractive. Presently, we’re seeing clients securing deals at rates between 5.5%-6.5% depending on where they’re based and their LTV. Having peaked in August 2023 they’re now at their lowest rate in a year, evident on this graph produced by consumer champion Which.
UK Buy to let mortgages 2023-2024
Where can I get a good buy-to-let mortgage as a non-UK resident?
As ever, options for international-based investors vary and we recommend speaking to a specialist expat broker to find the best deals for you. We work with a handful of lenders that every month help our clients from across the globe to secure the best mortgage for their UK buy-to-let investment property. There is so much to be done to secure advantageous rates that a specialist lender can really assist you with. Get in touch with us today for a referral.
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RICHARD BRADSTOCK
Managing Director
about the AUTHOR
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals. The RPA Group was born out of a duty of care to provide property investors with an industry-leading and integral service, one that connects investors with quality and desirable investment opportunities, whilst providing reliable and trustworthy market commentary and analysis alongside, enabling investors to make the best, most-educated decisions for them.