The UK Budget of Wednesday 26th November has been delivered and whilst it does not set mortgage rates on its own, it does influence what home buyers can afford. In conjunction with other factors such as SONIA Swap Rates, The Bank of England Monetary Policy Committee interest rate policy, global market stability and financial forecasting, home-movers post budget have a set of factors that will influence their decisions and a set of criteria to inform their next steps.
In the run up to the budget, it has been suggested that buyers have been delaying committing to next steps while they see what the budget brings. Rightmove recently reported that ‘The upcoming Budget, and the long run up to it, has created hesitancy’. It seems markets received the budget well. The mortgage market remains stable, in fact, rates are moving down a little.
Rightmove reports the average two-year fixed mortgage rate is currently 4.41%, compared to 5.06% at this time last year. While the Bank of England held the Base Rate in November, there is some optimism that a 0.25% cut in the base rate may be made at the final meeting of 2025, in December. Some mortgage lenders are offering high profile cheaper rates as they compete for end-of-year business which will likely continue. The Budget and the build up to the announcement had created a lot of uncertainty and now the announcements are out the way, home-movers can move forward steadily with more confidence.
Rightmove also highlight that property choice at its highest level in a decade. Over a third (34%) of homes currently on the market have had an asking price reduction, with the average size of reduction being 7%. Both figures are the highest since February 2024, making this very much a buyers’ market. Now the budget has been delivered and facts are confirmed, estate agents are anticipating more listings coming onto the market.
With lenders stretching affordability currently too, there are some tentative things taking place that benefit home – movers.
Henry Knight from Springtide Capital Mortgage Brokers comments:
‘Now the budget has been delivered we see a stable mortgage market as we approach the end of the year. For home-movers any effect on mortgage rates is likely to be gradual and house price growth is projected to be modest rather than rapid. Economic data and Bank of England decisions can move rates either way, so reviewing options early can help you understand your potential options. No new stamp duty relief or schemes were introduced in the budget and we would welcome some new initiatives from the government for first time buyers to help get them onto the property ladder.’
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Sources:
SONIA interest rate benchmark | Bank of England
Monetary Policy Committee dates for 2025 and 2026 | Bank of England
https://www.rightmove.co.uk/news/articles/property-news/housing-market-update-november-2025/
6.5 times salary mortgages back on the market | Springtide Capital