As the UK property market adapts to economic changes and fluctuating interest rates, Rightmove’s latest commentary offers vital insight into mortgage trends and buyer sentiment.
We break down the latest developments, including current mortgage rates, buyer activity, lender strategies, and the future outlook for 2025.
Mortgage Rates March 2025 – Stability Amid Cautious Optimism
The mortgage market in March 2025 shows signs of cautious recovery, with lenders adjusting rates to stimulate borrowing while remaining aligned with the Bank of England’s monetary policy.
Fixed-rate mortgages, especially 5-year deals, have seen mild reductions across major lenders, reflecting increased competition and moderated inflation expectations.
Mortgage Rates – March 2025
2-Year Fixed: 4.69% (down 0.06% from February 2025)
5-Year Fixed: 4.39% (down 0.10% from February 2025)
Tracker (Base +0.75%): 5.25% (unchanged)
Standard Variable Rate (SVR): 7.74% (up 0.15%)
High-street banks and specialist lenders are rolling out sub-4.5% products for borrowers with 25%+ deposits, indicating growing confidence in medium-term market stability.
Buyer Demand Trends – Resilience in Key Segments
According to Rightmove’s data, buyer demand remains resilient, particularly in first-time buyer and downsizer segments.
The number of property enquiries in Q1 2025 is up 11% year-on-year, with London, Manchester, and Bristol showing vigorous search activity.
Key Observations:
First-time buyers are returning, supported by lower deposit schemes and improved affordability metrics.
Upsizers and second-steppers are still cautious but are more active than in late 2024.
Cash buyers remain a powerful force, particularly in regional and coastal areas.
Lending Criteria Easing – Increased Competition Among Lenders
Lenders are cautiously loosening criteria to compete for a growing base of creditworthy borrowers. We’ve seen:
Increased loan-to-income multiples up to 5.5x for select borrowers.
More flexible credit scoring thresholds.
Introduction of zero-fee products and free valuation offers.
Innovative solutions like green mortgages tied to EPC ratings.
Example:
Nationwide Building Society recently launched a 4.24% 5-year fixed mortgage at 85% LTV with no arrangement fees, aiming to attract young professionals in urban zones.
Impact of Inflation and Bank of England Rate Path
While inflation has cooled to 3.1%, it’s still above the 2% target. The Bank of England held the base rate at 5.00% in March, but market expectations suggest a potential cut in late Q2 or early Q3 2025.
Forecast:
The base rate is expected to fall to 4.50% by Q4 2025.
Mortgage rates may dip below 4% by summer if inflation data continues to ease.
Fixed-rate mortgages offer a hedge against unexpected policy shifts.
Buyer Psychology – Confidence Returns Cautiously
There’s a perceptible shift in buyer psychology. While affordability remains strained, improved wage growth and mortgage rate cuts are rebuilding confidence. Search terms like “best-fixed rate mortgage March 2025” and “should I buy now UK” have surged, reflecting growing public engagement.
Sentiment Index (March 2025):
Buyer Confidence: 6.8/10
Seller Confidence: 5.9/10
Market Stability Perception: 7.2/10
Opportunities in the 2025 Housing Market
With house price growth projected to stay flat or modestly rise (1–2% YoY), this creates a window of opportunity for buyers and investors seeking long-term value.
Recommended Strategies:
Lock in fixed rates now before predicted summer volatility.
Negotiate incentives such as stamp duty contributions or refurb credits.
Explore regional markets like Leeds, Nottingham, and Glasgow for high rental yields and capital growth potential.
Rightmove Commentary – Key Highlights from the March Report
Rightmove’s March 2025 Housing Trends Report highlights:
An 8% YoY increase in listings, boosting buyer choice.
Time to sell averages 58 days, down from 71 days in late 2024.
Prices are stabilising with a 0.2% month-on-month increase across England and Wales.
Quote from Rightmove Director of Property Science, Tim Bannister:
“We’re seeing an active spring market emerge earlier than expected, driven by better mortgage deals and renewed buyer motivation.”
The Bank of England Base Rate affects how much it costs lenders to borrow money.
This, in turn, impacts how lenders price their mortgage products.
The pricing of mortgages influences how affordable they are for buyers.
More buyers can enter the market if mortgages are affordable, increasing buyer demand.
Higher demand often leads to a rise in property prices.
As property prices and activity increase, overall market activity grows.
This growth improves the confidence index, which reflects how optimistic people feel about the market.
That confidence then feeds back into how mortgage products are priced moving forward.
This feedback loop shows how interest rates and affordability drive the entire housing ecosystem.
Conclusion – Market Outlook for Q2 2025
As the UK housing market transitions into the second quarter of 2025, momentum is building.
Lower mortgage rates, improved sentiment, and greater product diversity signal a constructive environment for buyers.
However, lingering cost-of-living pressures and geopolitical uncertainties warrant a measured approach.
We recommend that prospective buyers:
Compare mortgage rates rigorously.
Factor in long-term affordability.
Engage with qualified mortgage brokers for tailored advice.
Stay informed, act strategically, and take advantage of the shifting mortgage landscape.
frequently Asked Questions (FAQ)
Are mortgage rates going down in 2025?
Yes, as of March 2025, many lenders have reduced their mortgage rates slightly, especially for 5-year fixed deals.
This is due to cooling inflation and expectations that the Bank of England may lower the base rate later in the year.
What is the current average mortgage rate in the UK?
As of March 2025:
2-year fixed: 4.69%
5-year fixed: 4.39%
Tracker: around 5.25%
Standard Variable Rate (SVR): around 7.74%
Should I fix my mortgage now or wait?
If you prefer certainty and want to avoid potential rate increases, fixing now may be a good idea. However, if rates drop later in the year, you might choose a tracker or wait to remortgage.
What is affecting mortgage rates right now?
Mortgage rates are influenced by:
The Bank of England’s base rate
Inflation trends
Lender competition
Market demand from buyers
Is it a good time to buy property in the UK?
It can be, especially if you’re a first-time buyer or have a substantial deposit. With more listings and slightly lower mortgage rates, more choices and better deals exist.
Will the base rate be cut in 2025?
Economists expect a possible base rate cut later in 2025, depending on inflation and economic conditions. However, nothing is guaranteed, so it’s best to watch updates from the Bank of England.
Are lenders offering any special mortgage deals?
Yes, some lenders are offering:
Zero-fee mortgages
Free valuations
Green mortgage incentives
Higher-income multiples for specific borrowers
How can I get the best mortgage rate?
Use a mortgage broker to compare products
Improve your credit score
Save a larger deposit
Consider fixing for 5 years for lower rates
Read our other Blogs:
Planning and Infrastructure Bill: UK Property Sector
Leasehold to Be Abolished for Flats: What the New Legislation Means for Property Owners
