- The Bank of England trimmed the Base Rate to 4.00% on 7 August 2025, marking the third cut in the past year. Inflation remains elevated at 3.6%.
- As a result, average two- and five-year fixed mortgage rates are now hovering around 4.49–4.51%, with two-year fixes at roughly 4.49% and five-year fixes at 4.50–4.51%, both slightly lower than last year.
- Affordability is improving: typical first-time buyer mortgage payments have dropped from about £1,002 to £909 per month—a near £100 saving.
- But don’t expect big leaps forward: Rightmove and their mortgage experts caution that rates are expected to remain “pretty much flat” for the rest of 2025, with only minor fluctuations likely
Property Market: Buyers Gaining the Upper Hand
- Asking prices have slipped by 1.3% in August, down £4,969 to an average of £368,740—a typical summer dip, though slightly more pronounced this year
- July marked the strongest month for sales since 2020, fuelled by more competitive pricing. Agreed sales are running approximately 8% ahead of last year, and housing stock is up by 10%—more choice equals more leverage for buyers
- Looking back, July’s price drop of 1.2% was the steepest summer decline in over 20 years, although nationally, prices remain slightly up (~0.3% year-on-year)
- Affordability continues to improve: two-year fixed rates have dipped from 5.34% to around 4.53%, saving buyers an average of almost £150 per month on a typical home
- However, buyer demand has softened recently amid talk of impending tax increases and uncertainty over further rate cuts, potentially cooling market momentum
What This Means for JW Woods Clients
For Buyers:
- Improved affordability—thanks to lower mortgage rates and more competitively priced homes—makes now an opportune time to enter the market.
- Bargaining power lies with you: more listings and faster sale rates on well-priced homes (32 days vs. 99 for reduced-price listings) give buyers stronger negotiating leverage.
- But don’t delay: while sentiment is positive, further rate cuts are uncertain, and market momentum may slow as autumn progresses
For Sellers:
- Thoughtful pricing is key to capturing buyer interest—especially in a market where the average listing is down more than £10,000 compared to three months ago.
- Well-presented properties are selling swiftly—62 days on average, and just 32 days if priced right from the start
- Watch the incoming Budget and mortgage rate chatter closely—it could influence buyer confidence and urgency in the coming weeks