In recent weeks, a growing number of UK lenders have reduced fixed mortgage rates. This
reflects widespread expectations that the Bank of England will implement deeper and
faster interest rate cuts in the months ahead. These moves have been driven largely by
heightened global economic uncertainty. After former US President Donald
Trump advanced new trade tariffs on imports from over 60 countries, this reignited fears of
a global economic slowdown.
According to financial data provider Moneyfacts, the average two-year fixed mortgage
rate dropped to 5.30%. Meanwhile the five-year fixed rate fell to 5.15% as of 9 April 2025.
Although these remain well above the pre-pandemic levels of early 2022, they represent a
significant decline from the peaks of 6.85% and 6.37% seen in August 2023. The
consensus among financial markets and economists—as of mid-April—is now for four
Bank of England rate cuts over the next 12 months, compared to just two expected
earlier in the same week.
On the lending front, Coventry Building Society led the charge by launching a two-year
fixed mortgage at 3.89%. They become the first major UK lender to offer a rate below 4%.
This was quickly followed by similar moves from Clydesdale Bank, Newcastle Building
Society, TSB, and the Co-operative Bank. This suggests that the market may be entering a new
phase of competitive repricing.
Market Recovery Supported by Improving Buyer Affordability
As of February 2025, the UK housing market has entered a phase of stable recovery.
According to a March report by Zoopla, average house prices rose by 1.8% year-on-year.
It’s slightly down from 1.9% in January, but a clear rebound from -0.2% the same period last
year. Forecasts suggest prices will increase by 2.5% by year-end, reflecting a measured
and sustainable recovery.
Transaction activity is also recovering. Zoopla reports a 5% year-on-year increase in sales
agreed, alongside a 10% rise in buyer demand—evidence that confidence is returning and
buyers are re-engaging with the market.
This recovery is underpinned by stronger household finances and improving mortgage conditions. Data from the Office for National Statistics (ONS) shows that average wages
rose by 6% year-on-year as of Q1 2025.
Together, this combination of moderate price growth, rising incomes, and easing
borrowing costs provides a solid foundation for stronger transaction momentum and
improving buyer confidence—key ingredients in the positive fundamentals of the UK
housing market this spring.
Positive Implications for Cosy Hauz and Investors
Recent mortgage rate cuts and improved buyer affordability create clear benefits for Cosy
Hauz. With more lenders offering sub-4% rates and wages on the rise, first-time buyers
and movers have stronger purchasing power, supporting faster sales across our
developments.
As buyer confidence improves, decision-making is becoming quicker. Our well-located
homes in Southwest London are well placed to capture this renewed demand, particularly
during the spring and summer sales period.
A more stable financing environment also supports our ability to manage development costs and plan future investments. This helps improve efficiency and long-term returns.
Looking ahead to 2025, we are positioned for even greater success with improving
market conditions and stronger buyer affordability. We project total sales of £6,651,057
this year, and several of our properties are already under offer, indicating rising buyer
confidence in our offerings.
Stronger sales performance translates directly into faster capital recovery, lower holding
risks, and tighter cost control. All these factors improve profit margins. For our
investors, consistent and healthy sales performance means stronger cash flow and greater
operational certainty, enabling us to meet our monthly fixed income commitments
reliably. A stable sales pipeline also reduces risk exposure and strengthens the foundation
for secure and predictable investor returns.
At Cosy Hauz, we remain committed to building better homes and better returns. Visit our website and get to know more about what we do.
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