The predictions are in for 2025 as the year ends and the festivities begin

Enzo Mora CEO and founder of The Mortgage Brain is crossing all digits for cheaper lending next year.

For most retailers, it’s the busiest and most profitable time of year and judging by the crowds in my local high street 2024 is no exception. Meanwhile, here at The Mortgage Brain we too are pulling out all the stops to help many of our customers who are due to complete their house purchase before Christmas. And for those with a little more time we’ve seen lenders Barclays and Leeds reduce their rates recently and other lenders are following suit. Some of our top deals for a 75% loan to value mortgage include two year fixed rates at 1.94% based on a £250,000 borrowed over 25 years or from 4.24% for a remortgage five-year fixed deal on the same loan basis. That’s great news!

Homebuying affordability improves

Some new data from lender Halifax shows that buying a home has become slightly more affordable relative to income. Wage growth has outpaced house price inflation, with pay increasing by +5%, compared to a +3.8% rise in house prices over the past year. Mortgage costs as a percentage of income have fallen to 29% from 33% over the same period and the number of new mortgages agreed recently reached its highest level in two years.

Innovative affordable moves from lenders

Sticking with Halifax, it’s just announced it will be using a property’s Energy Performance Certificate (EPC) rating in its mortgage affordability assessments. Properties with higher EPC ratings e.g. A/B are more energy efficient and cheaper to run and Halifax will use EPC data and energy bill analysis to improve lending. For new build properties, a ‘predicted’ EPC rating will be accepted, based on a Predicted Energy Assessment (PEA) or Standard Assessment Procedure (SAP) rating.

Predictions are in for 2025

It’s that time of year when everyone is predicting what will happen next year for the property market. Rightmove says national average asking prices will rise by 4% in 2024. The portal also expects the number of homes for sale to remain high next year, meaning strong competition for sellers, which will likely prevent higher price growth. Rightmove anticipates a higher number of transactions in 2025 of around 1.15 million in total. Nationwide says that providing the economy continues to recover steadily, the underlying pace of housing market activity is likely to continue to strengthen gradually with house price growth broadly in the 2-4% range in 2025. I’m pleased that the Bank of England governor is envisaging four 0.25% rate cuts next year from its current 4.75%.

First time buyers hope to meet stamp duty deadline

We’re helping many first-time buyers to get mortgage offers so they can meet the stamp duty deadline for the reduced rates that end next March. The good news is that there are still many parts of the UK where first-time buyers can find a property up to the new stamp duty-free threshold of £300,000 from April 1 2025. As buyer affordability improves and rents carry on rising, all be at a slower rate, we’re predicting a busy year for these buyers hoping to get on the ladder.

That was the year that was!

I can hardly believe that we’re at the end of yet another busy year where we’ve seen lending return to pre-covid levels. And that means more homeowners getting better deals from The Mortgage Brain something I can predict for 2025! A happy and safe Christmas to all.