The Bank of England (BoE) has announced that the Base Rate will remain at 4.5% this month. This follows a 0.25% cut in February, which was the third reduction since August 2024. While the decision to hold was widely expected, the focus remains on balancing inflation (currently at 3%) with the wider economy.
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With further cuts predicted throughout 2025, the Base Rate could fall to around 3.75% by the end of the year. This is encouraging news for buyers and homeowners alike, as mortgage rates are expected to become more competitive in the coming months, making borrowing more affordable and driving greater activity in the market.
So, what does this mean for mortgages, particularly in sought-after areas such as Virginia Water and Wentworth, where high-value property transactions are common? Read on to find out…
How are mortgage rates responding?
Mortgage rates have remained relatively steady in recent weeks, with expectations that they will gradually decrease as the year progresses. Industry experts anticipate that by the end of 2025, average 2 and 5 year fixed rates could settle around 4%.
Interestingly, after a period where 2-year fixed deals were significantly more expensive than 5-year options, this gap is closing. In fact, the lowest available mortgage rate is now a 2-year product, though only for those with the largest deposits. At present the average 5-year fixed rate is 4.73% and the average 2-year fixed rate is 4.89%.
What does this mean for homeowners in Virginia Water and Wentworth?
If you are on a fixed-rate mortgage, your monthly payments will stay the same until your current deal ends. However, if you have a variable or tracker mortgage, the Base Rate hold means your payments will remain unchanged, for now.
For those approaching the end of their fixed-rate term, now is the time to start exploring re-mortgage options. Under the Mortgage Charter, lenders allow borrowers to lock in a new deal up to six months before their current rate expires. Failing to act early could mean moving onto a lender’s Standard Variable Rate (SVR), which is currently averaging 7.51%.
What if you’re a cash buyer?
For cash buyers, an interest rate hold, and potential future cuts, can have both advantages and considerations. Without the need for a mortgage, cash buyers are not directly affected by fluctuating mortgage rates. However, a stable or declining Base Rate could encourage more mortgage-dependent buyers into the market, increasing competition for properties.
In prestigious areas like Wentworth and Virginia Water, where luxury homes attract both cash buyers and those securing high-value mortgages, a rise in buyer demand could mean less negotiating power for those looking to purchase without financing. Sellers may feel less pressure to accept lower offers, as more buyers can access competitive lending.
That said, cash buyers still hold strong negotiating power, particularly in chain-free purchases or where sellers are looking for a quick sale. They also benefit from avoiding additional costs such as mortgage arrangement fees and interest payments over time. Ultimately, whether now is the right time to buy will depend on individual circumstances and long-term property market trends.
When will interest rates fall?
The Bank of England’s Monetary Policy Committee meets every six weeks to assess interest rates. Historically, after a period of rate increases, cuts tend to be introduced gradually. The next decision is expected on 8 May 2025, and if economic conditions allow, we may see another reduction to encourage further stability in the mortgage market.
For those considering a move or re-mortgaging in Virginia Water, Wentworth, or the surrounding areas, now is a good time to seek professional mortgage advice. As trusted estate agents in Virginia Water, we are here to assist you in navigating the market and securing the right property for your needs.
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We are here to help you sell your home and find your next dream property. We can help you define your budget, asking price, and more. If you’re considering buying, selling, or re-mortgaging, now is the time to explore your options. Our team is here to help you navigate the market. Contact us today for expert advice tailored to your needs.
Ready to make a move?
2025 could be the perfect time to make your move. With increased buyer demand, falling mortgage rates, and a steady rise in property prices, the market is set to work in your favour. Contact us today for a free property valuation and let us help you set the right price and strategy to make the most of this dynamic market.
At Barton Wyatt, we’re here to help make your move as seamless as possible. Whether you’re ready to sell now or in the coming months, our experienced team is here to guide you every step of the way. Let’s make 2025 the year you achieve your property goals!
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If you’re thinking of moving to the area or buying a property to let, take a look at our portfolio of properties for sale in Virginia Water and the surrounding areas. If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. Follow us on Facebook, Instagram, and LinkedIn to stay updated.
