Mortgage experts predict that competition among lenders will lead to a war on loan prices, benefiting homebuyers.
Financial experts predicted that many financial institutions will cut mortgage rates in the next week or two, warning borrowers to get the best deals possible.
At the same time, a record number of sellers put their homes up for sale on Right Move on Boxing Day, the website reported, in a sign that the real estate market is heating up.
Just over 10,000 homes went on the market the day after Christmas, a Boxing Day record and the highest number of new sales in a single day since 2011, according to Rightmove.
The number of buyers contacting real estate agents about properties for sale also soared, 17% more than on Boxing Day 2022.
Mortgage broker we spoke to independent person There was cautious optimism about the real estate market as Halifax and HSBC announced interest rate cuts.
New two-, five- and 10-year fixed-term contracts in Halifax will be reduced by up to 0.83 percentage points.
Lewis Shaw of Mansfield-based Shaw Financial Services predicted that lenders would restart their mortgage product ranges and lower interest rates within the next week or two.
“A price war is on the horizon because most financial institutions missed their lending targets last year and don’t want that to happen again, so any financial institution could come out of the gate with a bang,” he said. is high,” he said.
He expected strong competition, particularly around mortgage refinances, as the 1.6 million mortgages scheduled for renewal over the next 12 months make up a large portion of the market.
“Therefore, financial institutions will either have to become very competitive with internal rates to retain existing customers, or offer better remortgage rates to lure customers away from other financial institutions. We hope that will be a positive,” Shaw added.
Liz Malik, of Essex-based R3 Mortgages, said lenders would be “set up to take market share with very aggressive pricing” once staff return from annual leave. Ta.
“Next week, we hope to see the rest of the big banks hit the ground running and get serious about where they want to be in 2024,” he said.
“2023 was a year of product transfers, so they will also target the remortgage market. A lot of the deals are going to be driven by people staying with lenders and renegotiating new deals because there wasn’t a lot of appetite for new deals. “Because no one knew where the market was going.”
“Everything has calmed down from there and many lenders will be relieved that there hasn’t been a huge drop in property prices in 2023 as some were expecting.”
Mr Malik warned that economic shocks could quickly turn the agreement into a “mobile holiday”.
“If a lender comes up with something, it might be time to take advantage of it. And then if things improve later on, obviously you need to re-evaluate your situation as that time approaches.”
Mr Malik said the property market could heat up later this year, so first-time buyers in particular should be wary of deals coming up now.
Mr Shaw warned that trying to time the market would be a “fool’s errand”, saying: It’s really not our job.
“It would be unwise for homeowners to try to beat the market and predict what interest rates will be.
“And when it comes to trading rates, even the most talented economists at the world’s leading investment banks don’t always get this right. So it’s probably a fool’s errand to try.
“Could you please lower the price a little more?” Maybe we can do it by the end of the year, but maybe not. ”
Some housing market forecasts point to a modest overall decline in home prices this year, which could present opportunities for buyers.
Halifax expects home prices to fall between 2 and 4 per cent, while Nationwide Building Society expects home prices to fall by low single digits or stay about the same this year.