Skipton Building Society has announced it will reduce interest rates. In the same week, three of the ‘big six’ lenders introduced price increases.
Earlier today, Skipton revealed it was cutting rates on its two-year fixed rate mortgages and popular mortgages Mortgage track record – the deposit-free product for reliable tenants.
This was a welcome relief after Nationwide, Santander and Natwest all announced they would increase rates by up to 0.25% from today (Tuesday April 30).
But while Skipton has bucked an unpopular trend, the mortgage market remains unpredictable for borrowers and brokers.
Michelle Lawson, director of Lawson Financial, speaking via the Newspage Agency, said: “This is great news for borrowers, but inconsistency remains the prevailing theme in the mortgage market. While some rates are falling, others are rising.
“However, these small victories are steps in the right direction, and we will happily accept them. A catalyst is needed to bring about change, and maybe Skipton is leading the charge.”
Today, the average two-year fixed interest rate is 5.90%. According to Moneyfacts, this is an increase compared to an average interest rate of 5.87% on Monday.
Meanwhile, the average five-year fixed rate is 5.48%, after rising from 5.44% on Monday.
The wave of price changes that have happened has been happening since last weekcomes after HMRC data showed the number of homes sold in March was 6% lower than the same month in 2023.
Karen Noye, mortgage expert at Quilter, said rising mortgage rates may have deterred potential buyers from making a move.
She said: “Mortgage rates have gradually risen again since then [since the start of the year] which may have caused potential home buyers to put their plans on hold again.
“Higher mortgage rates still appear to be having an impact on buyer demand, which has cooled the market, resulting in a lower number of property transactions.
“New figures from the Bank of England this morning reiterate this, showing a significant fall in the net amount of mortgage debt lent, which stood at just £0.3 billion in March, down significantly from £1.6 billion in February.”
Noye added: “Coupled with ongoing cost-of-living pressures, many potential buyers will continue to face a an uphill battle when it comes to affordabilityespecially those first-time buyers who will also likely have found it much more difficult to save enough money for a down payment.”