Lower asking prices and cheaper mortgage deals are kicking off the New Year property market with a bang, property experts say.
A home loan price war broke out within 48 hours of 2024 as lenders battled for customers.
And house sellers are pricing their properties to sell with an average £8,500 cut from values.
Britain’s biggest mortgage lender set the pace with up to 0.83% cut from its re-mortgage deals.
The Halifax drop applies to two-year, five-year and ten-year fixed-rate deals and is equivalent to a £145 a month reduction for those on a £300,000 loan with 25 years of repayment left and a 40% stake in their home.
HSBC UK also slashes its fixed rates from Thursday.
The move includes a five-year rate of 3.94% for remortgage customers borrowing up to 60% of the property value.
HSBC’s two-year fixed rate for remortgages dips to 4.49%, again for those with at least 40% equity in their home.
David Hollingworth, associate director at L&C Mortgages, said: “These cuts are just the latest salvo in an increasingly fast-moving market.
“They are some of the lowest since the spike in the base interest rate last summer.
“Although borrowers coming to the end of their current fixed-rate this year will still be looking at a rise in payments, these new lower rates will at least take some of the sting out of the inevitable rise.
“They’re notable in that the rates are on offer to those borrowers looking to remortgage, a departure from the recent trend of pricing favouring home movers.
“With large numbers of borrowers anxiously approaching the expiry of a fix taken during the ultra-low-rate period, this is a welcome move and hopefully a signal for more lenders to follow suit, improving options for those facing payment shock.
“We thought the new year would start with a bang and that’s proving to be the case.”
Ranald Mitchell, director at Charwin Private Clients mortgage broker in Norwich, said: “An unprecedented rate war is well under way and 2024 will see some seismic moves downwards in interest rates compared to 2023.
“With net mortgage lending predicted to be lower than last year, mortgage providers will be pulling out all the stops, not just to acquire new business, but also to protect their existing mortgage customer base.”
According to financial information website Moneyfacts, across all deposit sizes, the average two-year fixed homeowner mortgage rate on the market was 5.92% on Wednesday, down from 5.93% on Tuesday.
The average five-year fixed homeowner mortgage rate is 5.53%, down from an average rate of 5.54%.
The reductions come as interest rates are expected to plunge this year, according to the financial markets.
The Bank of England’s Monetary Policy Committee is set to cut rates six times in 2024, taking them from a 15-year high of 5.25% today to 3.75% by next Christmas.
Meanwhile the January property sales are in full swing with thousands of sellers re-entering the market at a discounted price.
Data from the website Yopa shows 2,019 properties are back on sale across Britain having previously failed to sell.
They are up for an average of £362,244 – compared to the overall average national house price of £370,730 this is a discount of £8,486, or 2.3%.
In Scotland, homes returning to the market are priced four per cent below the wider regional average price offering buyers a cash saving of £8,010.
In London the discount is 3.9%, followed by the East Midlands at 3.7%, the South West, 2.7% and the North East at 2%.
Verona Frankish, chief executive of Yopa, said: “There will have been lots of motivated sellers entering the market towards the back end of 2023 who would have been hopeful of securing a sale before the Christmas break as market conditions started to improve.
“Not all of them will have managed to do so and now that 2024 is upon us, these sellers will be hoping to take advantage of strengthening market conditions and an uplift in buyer activity.
“And having already listed their home for sale once, many are likely to be offering a discount on their asking price in order to entice buyers to make an offer.”
