Four of the UK’s top lenders have slashed interest rates on fixed mortgage deals, providing some relief for struggling homeowners. Halifax, Britain’s biggest mortgage lender, announced cuts of up to 0.71 per cent on fixed-rate deals from Friday, reducing a typical five-year rate from 6.10 per cent to 5.39 per cent.
Experts predict further reductions could spark a price war among lenders. Jamie Lennox of Dimora Mortgages described Halifax's move as “the single largest rate reduction I have seen from a high street lender” and expects others to follow. Nationwide, HSBC and TSB have also cut rates earlier this week, by up to 0.55 per cent, 0.35 per cent and 0.4 per cent respectively.
Riz Malik of R3 Mortgages said: “I expect other major high street lenders to cut rates by the end of the week. This repricing will be beneficial to thousands of households looking to renegotiate their mortgage between now and the end of the year.” Lewis Shaw of Shaw Financial Services also predicted a price war as transaction volumes drop and lenders compete to meet targets.
Meanwhile, average fixed mortgage rates have dipped slightly, with two-year deals falling from 6.84 per cent to 6.83 per cent and five-year deals from 6.35 per cent to 6.34 per cent, according to Moneyfacts. The cuts come despite the Bank of England’s continued base rate rises.
However, the rental market continues to tighten. The Royal Institution of Chartered Surveyors reported that 63 per cent of professionals expect rental prices to rise over the next three months, a record high. Chief economist Simon Rubinsohn said: “Demand shows no signs of letting up, supply remains constrained and that means rents are likely to continue rising sharply despite the cost of living crisis.”
