Should one consider purchasing a residential property at the present moment?

With interest rates steadily decreasing, the current housing market presents a potential opportunity for prospective homebuyers. Despite mortgage rates still being higher than their long-term average, sub-4% deals have recently resurfaced, offering lower borrowing costs for buyers. Further rate cuts are anticipated this year, which might potentially ease affordability constraints even further.

The Bank of England recently voted to lower the base rate from 4.5% to 4.25% on May 8, marking the lowest rate since May 2023.

Amanda Bryden, head of mortgages at Halifax, commented that mortgage rates have been decreasing, and most lenders are now offering rates below 4%. In conjunction with positive earnings growth outpacing broader inflation, these factors have worked together to improve affordability for many buyers.

However, potential homebuyers may need to contend with higher stamp duty bills due to drops in Stamp Duty thresholds on April 1, potentially adding thousands to the cost of moving house.

According to the latest house price data from Halifax, UK property prices rose by 0.3% in April, with the annual growth rate ticking up to 3.2%.

Bryden noted that the stamp duty changes prompted a surge in transactions in the early part of the year, as buyers rushed to beat the tax rise deadline. Despite this, property prices have remained relatively stable over the past six months, a level of stability not seen since the pandemic.

"There could be an opportunity to drive a hard bargain during a slight lull in demand," Sarah Coles, head of personal finance at Hargreaves Lansdown, suggested. She explained that the stamp duty holiday encouraged buyers to snap up properties before the end of March, meaning sellers are eager for offers at the moment, potentially offering an excellent opportunity for prospective buyers.

The ongoing decrease in mortgage rates can be partially attributed to President Trump's tariffs, fueling speculation of more interest rate cuts this year. As of late April 2025, the average two-year fixed mortgage rate was 5.14%, down from 5.32% just a month prior, and the average five-year fix was 5.08%, a drop from 5.17%.

Coles indicated that falling interest rates, combined with expectations of two or three more cuts by the end of the year, make mortgage rates increasingly attractive. She emphasized that the possibility of additional rate cuts this year would provide room for them to decrease even further.

Moneyfacts reported that the number of low-deposit mortgage products available is at its highest in 17 years, granting assistance to first-time buyers entering the property market.

Prospective buyers should weigh up whether they can manage monthly mortgage repayments, particularly in the face of rising costs elsewhere. While the worst of inflation appears to be behind us, an array of bill hikes came into effect in April, affecting energy bills, water bills, council tax, and more.

Coles highlighted that the unpredictable state of the global economy could affect job security, urging buyers to consider their financial position before making a commitment to buy a home. Building a robust property deposit and maintaining emergency savings in a competitive easy-access savings account may offer some protection during uncertain economic times.

If buyers have factored in potential bill hikes and planned for potential financial setbacks, such as redundancy, they may be ready to proceed with a property purchase. However, if they feel that buying now would stretch their income to the max and leave them with limited emergency savings, it might be better to wait. They could consider building a larger deposit, negotiating a pay rise, or waiting until mortgage rates decrease further.

Before embarking on a house or apartment purchase, it is important for buyers to take their time during property viewings and ask pertinent questions. St. Modwen Homes' property expert Alison Maclean suggests asking questions such as:

What's hidden in the loft? Rodent droppings, old asbestos insulation, and questionable DIY wiring can lurk unseen. Request access to the loft during a second viewing to ensure everything is up to standard.
How old is the boiler and when was it last serviced? Boilers typically last 10-15 years, with full replacements costing thousands. If the boiler is near the end of its lifetime, negotiate on the price or ask for it to be replaced before closing the deal.
What's the parking situation really like? A designated parking space may not guarantee an easy parking experience. Check peak hours to see if the street becomes crowded, especially near schools or high streets.
What is the Energy Performance Certificate (EPC)? The EPC rates a property's energy efficiency and provides an estimate of the potential running costs of the home. Consider these costs during the buying process.
What's the broadband speed and mobile signal like? With remote working becoming increasingly common, digital connectivity is more essential than ever. Check broadband speeds using online tools and inquire about blackspots or dropped calls from current owners.

The decreasing mortgage rates, combined with the increase in low-deposit mortgage products, could make purchasing a property more affordable for first-time buyers, as reported by Moneyfacts.
Prospective homebuyers should be mindful of rising costs elsewhere, such as energy bills, water bills, and council tax, when considering whether they can manage monthly mortgage repayments.
As interest rates are anticipated to decrease further this year, the housing market may present an attractive opportunity for those looking to invest or purchase real estate, despite potential stamp duty increases.
Buyers should take their time during property viewings and ask relevant questions such as the condition of the loft, the age and service history of the boiler, the parking situation, the Energy Performance Certificate rating, and the broadband speed and mobile signal in the property.
Before making a commitment to buy a home, buyers should consider their financial position carefully, taking into account potential economic uncertainty, job security, bill hikes, and personal finance management, and prepare accordingly by building a property deposit and maintaining emergency savings.