A More Affordable Christmas for Homebuyers
The latest research from award-winning mortgage adviser, Alexander Hall, has revealed that – despite the government failing to leave any affordability-focused initiatives under the tree in the recent Autumn Budget – this Christmas is shaping up to be a far more positive one for the nation’s homebuyers, as borrowers entering the market today are benefitting from greater choice, lower rates, and reduced monthly costs compared to last Christmas.
Alexander Hall analysed the current mortgage market by assessing the number of mortgage products available today, the average rates on offer, how these figures compare to December last year, and what this means for the average homebuyer when it comes to the monthly cost of their mortgage.
The research shows that mortgage product availability and the rates on offer have improved across all segments of the market when compared to last Christmas.
Notable boost in mortgage product availability
The buy-to-let sector has experienced several regulatory developments over the past year, most notably the introduction of the Renters’ Rights Act, yet lenders have responded with strong confidence in the market. As a result, landlords have seen the biggest uplift in choice, with the number of buy-to-let mortgage products surging by 68% compared to last Christmas.
First-time buyers have also seen a substantial improvement, with product availability up 23% year on year, while remortgagers and home movers have benefitted from more measured increases of 5% and 3% respectively.
Rates down across the board
When it comes to borrowing costs, every category of borrower is also better off than this time last year, with average mortgage rates falling across the board.
Buy-to-let investors have again seen the biggest improvement, with the average mortgage rate down by 0.77% since December 2024. First-time buyers are now benefiting from an average mortgage rate some 0.6% lower than last year, with the average rate for home movers falling by 0.42% and remortgagers by 0.34%.
Homebuyers saving £1,600 over a two year fixed-term
Alexander Hall then analysed what this shift means for the typical homebuyer purchasing at the current average UK house price of £272,998.
While the average property value has increased by 1.3% over the last year, requiring a slightly larger 15% deposit of £40,950 versus £40,414 last December, falling rates mean buyers are still materially better off.
Based on the average two-year fixed rate for an 85% LTV mortgage, a homebuyer making full monthly repayments today would pay £1,255 per month, down from £1,323 last Christmas.
This £68 monthly saving equates to £1,640 over the course of a two-year fixed mortgage term – a welcome boost to homebuyer affordability at a time when many households are navigating higher festive spending and ongoing cost-of-living pressures.
Richard Merrett, Managing Director of Alexander Hall, commented:
“While the Autumn Budget may have disappointed buyers hoping for direct support, the reality is that market conditions this Christmas are considerably more favourable than they were a year ago.
We’ve seen a steady expansion in mortgage product availability and a meaningful reduction in rates across every major borrower group and, for the average homebuyer, this translates into lower monthly repayments and greater flexibility when choosing a mortgage.
What’s more, we’re now seeing clear affordability improvements from an income-to-lending perspective. Many major lenders have strengthened their affordability assessments over recent months, allowing borrowers to access higher loan amounts than were possible a year ago. For buyers, that means more choice, greater purchasing power, and a better chance of securing the home that truly meets their needs.
With one final base rate decision still to come in December, the outlook remains encouraging and as we move into 2026, we expect improved mortgage affordability to continue supporting confidence and stability across the property market.”
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