Southern buyers benefit most from static house prices and lower mortgage rates
- Ahead of the Bank of England’s interest rate decision at 12:00pm on Thursday, Rightmove’s analysis shows that buyers in London and the south of England are benefitting most from improved affordability compared to last year
- Across Great Britain, the average monthly mortgage payment is now £84 lower than a year ago:
- In London, buyers are paying an average of £181 less than a year ago, with average asking prices having dropped by 1.1% versus last year as mortgage rates improve
- By contrast buyers in Scotland are only paying an average of £23 less on a monthly mortgage with prices having risen by 2.6%
- The average two-year fixed mortgage rate has lowered from 4.99% at this time last year, to 4.53% now
Ahead of the Bank of England’s interest rate decision at 12:00pm on Thursday, analysis from the UK’s largest property platform Rightmove shows that static house prices and lower mortgage rates are benefitting south of England buyers most.
Across Great Britain, the average monthly mortgage payment is currently £1,506 per month, versus £1,590 per month last year, an £84 drop. The average asking price for a home is £370,257.
The analysis is based on buyers purchasing a home at the average asking price, with a two-year fixed mortgage rate, and spreading the cost of the mortgage over 30 years.
However, with average asking price trends varying regionally, affordability improvements are benefitting buyers in London and the south of England more.
In London, where average asking prices are now 1.1% lower than at this time last year, someone purchasing a home at the average asking price could save £181 on a monthly mortgage. In the South East it’s £120 per month, and in the South West it’s £106 per month.
By contrast, in Scotland where the average asking price for a home has risen by 2.3% compared with last year, a typical buyer is only saving £23 on monthly mortgage costs versus last year, as house price increases keep closer pace with mortgage rate drops.
In the North West it’s a £24 saving, and in Yorkshire & The Humber it’s a £36 saving in monthly mortgage costs versus last year.
Over the last year, the average two-year fixed mortgage rate has lowered from 4.99%, to 4.53% now.
Colleen Babcock, Rightmove’s property expert says: “Competition amongst sellers to find a buyer is more heated in London and the south of England, while higher stamp duty rates have hit these regions harder, both contributing to lower asking prices compared to last year. The result for buyers is improved affordability when combined with lower mortgage rates, and the higher rate of agreed sales compared to last year suggests many are taking advantage. However, it’s still much more expensive to purchase a home in London and the south of England compared to other areas of Great Britain, so affordability is still stretched despite the increase in purchasing power.”
Matt Smith, Rightmove’s mortgage expert says: “We’re widely expecting a hold in the Bank Rate today. It will be particularly interesting to see how the Bank votes and its wider commentary around today’s decision to get a sense of how the next couple of months could play out. Although mortgage rates have trickled up in recent weeks as mortgage financing has become more expensive, we’re still seeing appetite from lenders to do business in what is typically a busy period for them.”
Regional mortgage payments
| Region | Average asking price | Average asking price change year-on-year | Average mortgage payment | Average mortgage payment change year-on-year |
| East Midlands | £291,578 | 0.9% | £1,240 | -£54 |
| East of England | £418,837 | 0.2% | £1,794 | -£90 |
| London | £675,074 | -1.1% | £2,927 | -£181 |
| North East | £194,737 | 0.5% | £831 | -£39 |
| North West | £270,275 | 3.2% | £1,123 | -£24 |
| Scotland | £199,146 | 2.6% | £833 | -£23 |
| South East | £479,982 | -0.7% | £2,073 | -£120 |
| South West | £382,531 | -1.3% | £1,662 | -£106 |
| Wales | £267,528 | 0.9% | £1,138 | -£49 |
| West Midlands | £293,645 | -0.1% | £1,260 | -£66 |
| Yorkshire and The Humber | £258,568 | 2.0% | £1,052 | -£36 |
You May Also Enjoy
Buying a Home? What you need to know about asbestos
Hodge Bank introduces 80% LTV on Interest Only Mortgages, helping borrowers maximise their affordability
The end of the ‘Forever Home’? 63 per cent of young homeowners prioritise flexibility and renovation potential over permanence
Ignoring these simple winter property maintenance tasks could cost you big time
Half of first-time buyers delaying until after the Budget