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Mortgage rates what is happening?

Mortgage rates: what is happening

The Bank of England opted to cut interest rates in February from 4.75 per cent to 4.5 per cent.

Base rate has been dropped by 0.75 percentage points since August when it was first cut from 5.25 per cent.

Between the start of July and October, the lowest five-year fixed rate mortgage fell from 4.28 per cent to 3.68 per cent. Meanwhile, the lowest two-year fix fell from 4.68 per cent to 3.84 per cent.

But the lowest rates are now higher at 4.13 per cent and 4.23 per cent, respectively, as rates have crept higher again with all of the best sub-4 per cent deals disappearing.

Nonetheless, mortgage rates remain well below their recent peak. 

In 2023, a combination of base rate hikes and worries over inflation figures saw average two-year fixed mortgage rates reach a high of 6.86 per cent in the summer, according to Moneyfacts, while five-year fixed rates hit 6.35 per cent. 

That said, mortgage rates still remain far higher than borrowers had enjoyed prior to the surge in 2022.

Roughly three years ago, the averages were hovering around 2.5 per cent for a five-year fix and 2.25 per cent for a two-year. 

In fact, as recently as October 2021, some of the lowest mortgage rates were under 1 per cent.

Will mortgage rates go down or up? 

Forecasts are tricky game at the best of times and interest rate expectations change regularly.

Mortgage borrowers on fixed rate deals should worry less about where the base rate is today, and more about where markets think it will go in the future. 

This is because banks tend to pre-empt base rate movements. Lenders change their fixed mortgage rates on the back of predictions about how high or low the base rate will ultimately go and how long it will stick there.

In 2023, forecasts for where the base rate would eventually peak fell from a high of 6.5 per cent to 5.25 per cent, mortgage rates shifted with this.

At the start of 2024, markets were pricing in six or seven base rate cuts, with investors betting on rates falling to 3.75 per cent or 3.5 per cent by Christmas.

And we now know how that ended up. Base rate ended the year at 4.75 per cent.  

Now, in 2025, markets are now suggesting that base rate will be cut two more times this year and fall to 4 per cent – but based on last year’s performance, these should all be taken with a pinch of salt.

Borrowers due to remortgage should stay on top of rate forecasts but also look to lock in some certainty as soon as they can. 

New fixes can be arranged through brokers around six months in advance, with the fees added to the loan and no upfront cost. There is no obligation to take the mortgage if rates fall – instead you could swap for a better deal –  but you will have it in your back pocket if you need it.

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Preparing your property

Once you have decided to put your property on the market and you have instructed your agent, you need to make sure you are ready for the marketing process. It is easy to think of the marketing process as just people visiting once or twice a week to have a look around and doing a quick tidy up before they arrive. To give you the best possible chance of success though, you need to take a more proactive approach and always be at the ready for viewings, even if they are at short notice.

First Impressions

You often get two opportunities to make a first impression. Firstly online and secondly in real life:

  • Online: This in part is about your choice of agent and how they market their properties online, both on their own websites and portals like Rightmove. It is also about being prepared for taking photographs and marketing details before the property goes live. Having images that show your property at its best will generate initial interest. It is important that you are telling a consistent story about your home and the photos should also match how the property presents itself in real life, so your potential buyers are not disappointed. Images should also be truthful and careful photography that conceals less desirable features won’t help you sell the property, as the potential buyer will see what’s there when they view.
  • In real life: The way your property is presented from the outside, call it curb-appeal, will set up the way a potential buyer feels about the property before they come in when they first view it. Many buyers will do a ‘drive by’ in advance to get a first look at the outside of the property beforehand and so maintaining a proactive approach to keeping things neat and tidy will make all the difference, even before the viewing.

Some of the things that you should consider are:

  • Keeping the garden tidy – especially in the autumn months
  • Washing down and painting front doors if they are looking tired
  • Cleaning the windows
  • Removing any dead plants and ideally replacing them with something fresh
  • If the bins live outside, tuck them away in a tidy corner, so they’re not the first thing you see
  • Clear out the weeds from the paths
  • If the front door mat is frayed and messy, replace it
  • If you have outside light, make sure that they are working and switched on for evening viewings
  • If you normally squeeze several cars on to your driveway, try parking around the corner to give your potential buyer space to pull in as if they already lived there
  • Plants and pots that frame the front door will make a welcoming entrance
  • If there is a communal hallway to your property, even though it may not be part of your home, tidy up abandoned flyers, post and newspapers etc

TIP: Talk to Mayhews estate agents about the type of buyer that might be interested in your home. They may be similar to you when you bought the property, so think about what they will be looking for in a property and focus on presenting the traits you think are most desirable.

Look at what other properties are available for your target buyer and consider what first impression those properties create online. If yours is better, it will be at the top of a buyer’s viewing list.

Mayhews have the option to upgrade a property to be a featured property on portals like rightmove, meaning the property will appear at the top of the page. Again, the first impression if you’re at the top of the page could make all the difference.

Presentation

The most successful viewing is when the potential buyer can see themselves living in the property and can also relate to the property as it is now. Some simple ways to improve the presentation of your property are:

  • Give rooms the right purpose: We don’t always use rooms for the purpose they were intended. We may use a dining room as a bedroom or a bedroom as a study. Some buyers find it hard to see beyond the current use of a room so, if you are marketing a room as a bedroom, it is best to set it up as a bedroom so you are showing them the purpose of the room, not just telling them what it could be.
  • Keep it tidy: Keeping your house clean and tidy for viewings will not only create the right impression but help buyers see beyond your contents.
  • Declutter: This is probably one of the most impactful things to do. Even if it means you rent some local storage during the marketing period, keeping the property free of unnecessary clutter will create a sense of space and a blank canvas for your buyer to more easily see themselves living there.
  • Let in light: Keeping curtains and blinds open and windows clean, will let in light and create a better sense of space. If you are going to be at home for a viewing, switch on the lights in the rooms before your buyer arrives.
    Set the temperature: If there are rooms in your home you rarely use and therefore rarely heat, switch on the radiators ahead of your viewing so the whole property is warm and welcoming.
  • Bathrooms and kitchens: Should always be clean, tidy and mould free. Try keeping just your essential toiletries and products in the bathroom and storing the rest to keep clutter at bay. In the kitchen keep the worktops as clear as possible, which will improve the sense of space.
  • Pets: Not everyone will love your pet as much as you do, so they are best kept out of sight. This is especially the case with enthusiastic dogs who may literally scare your buyer off.
  • Keep it simple: If you feel the need to re-decorate before marketing your property choose neutral colours that have a universal appeal.

Minor repairs: The little things add up and if there are simple repairs that you have been planning to do, get them done before putting your property on the market, it will give potential buyers few things to find wrong.

if you would like advice on how to prepare your home for sale give us a call and our experienced team can help and guide you.

www.mayhewestates.co.uk