For the first time in over four years, the Bank of England announced that interest rates would be dropped from 5.25% to 5%.

Following the interest rate announcement, a number of lenders are now lowering their mortgage rates to match.

The biggest impact had come from Natwest who launched a new five-year fixed rate mortgage. The 3.97% offer comes with a £1,495 fee and overtook Nationwide's 3.99% to be the lowest rate on the market. There is a caveat though – it's only available to home movers buying a property with a minimum of 40% as a deposit.

However this has been overtaken this morning by HSBC who have launched a 5 year fixed rate deal at a rate of 3.99% with a fee of £999. This is available for both new buyers and those switching mortgages (as long as they have either 40% equity or a 40% deposit).

They're also offering a fee-free option with a rate of 4.15% - while this is a higher interest rate, it may work out cheaper for those borrowing smaller amounts.

A number of banks will also adjust their SVR (Standard Variable Rate) for customers who aren't on a fixed mortgage rate. From September, these will be;

• Santander – 7.50% to 7.25%
• Lloyds – 7.25% to 7.00%
• Halifax – 8.74% to 8.49%

As the market stands at the moment, the rates are still slightly higher for borrowers with a smaller deposit but there are still some adjustments being made.

How will this affect the housing market?

According to data from Hamptons, almost a quarter of homes that came onto the market in the first week of July were under offer within two weeks. This is up 15% against the same time frame in 2023.

The average house price in July was £291,268 – 0.8% higher than recorded in June. Combined with the lower mortgage rates, this suggests a much more encouraging picture on the horizon for anyone hoping to buy their first home or move up the housing ladder.

If you're looking at buying a new home but aren't sure where to start, our friendly Sales team are always on hand to answer any questions you might have or offer any advice.

Discover our available plots here and start your journey to your dream home with Foreman Homes.