What experts predict will happen to house prices and mortgage rates in 2025
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IT'S been a roller coaster of a year in the housing market, so it's only right to be curious about what's in store for 2025. We explain what's happened this year and ask experts what they predict for mortgage rates and house prices next year. It hasn't been a smooth ride for first-time buyers and those looking to remortgage this year, as mortgage rates haven't been on a steady path.
![[The Sun asked experts to predict what will happen to mortgage rates next year]](https://www.thesun.co.uk/wp-content/uploads/2024/12/bk_mortgages_comp-1-1.jpg?strip=all&w=960)
In January, the average two-year fix stood at 5.93%, while the average five-year stood at 5.55%. This dropped down to 5.76% for a two-year fix and 5.34% for a five-year fix in March. This is because swap rates, which underpin fixed-rate mortgages, have been fluctuating in recent months leading lenders to adjust their rates.
However, in the summer rates began to climb again, before the average two-year fix hit 5.95% and a five-year hit 5.53%. This is because lenders were waiting in anticipation to see if the Bank of England (BoE) would cut interest rates in August. This is because figures from the Office for National Statistics (ONS) revealed that inflation hit the BoE's 2% target.
The Bank's aim was to bring inflation back under control after months of double digit price rises. If inflation is steady, there is less pressure on the Bank of England to put the base rate up further. In August, the BoE cut interest rates for the first time in four years in August this year, with rates currently standing at 4.75%.
