Sarah Thompson, Managing Director, Mortgage Scout – part of Leaders Romans Group – makes this prediction…

“As we enter 2025, the mortgage landscape shows signs of settling into a more stable rhythm, creating a positive outlook for buyers and homeowners alike. 

“Starting in early 2024, we saw interest rates at a peak due to efforts to tame inflation. However, as the year progressed, the market has shown encouraging signs of stability, with the Bank of England carefully managing adjustments to keep things on a steady course. Although many hoped for a rapid decrease in rates, the bank’s gradual approach prioritises a balanced recovery, setting up a smoother environment for the year ahead.

“Fixed mortgage rates across lenders, including NatWest and Barclays, have remained conservative. 

“While they may have nudged upward recently due to longer-term predictions, many lenders are now offering more competitive two-year fixed deals, giving borrowers flexibility and options in an environment where interest rates are expected to be stable rather than volatile. 

“This consistency means borrowers can plan with confidence, and those on shorter fixed-term deals are well positioned to take advantage of future shifts.

“Looking forward, house prices are expected to rise by approximately 3% in 2025—a healthy pace that suggests steady value growth without the risk of sudden price hikes. 

“Buyers who take action this year could see the benefits of rising property values as the market gains strength. The projected base rate for 2025, anticipated around 3.75% by the end of the year, also signals a more predictable environment for both buyers and existing homeowners, as mortgage repayments are expected to stabilise rather than fluctuate.

“For those considering a new mortgage or thinking about stepping onto the property ladder, the current landscape offers plenty of opportunity. With prices likely to continue their upward trend, waiting for significant rate drops may not yield the savings some expect. In fact, buying sooner could allow you to lock in value before house prices rise further.”