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April 2024

March has continued the trend of economic stability, we saw inflation drop to 3.4% which was fantastic news! 
March also showed a reduction in house prices of 0.2% but house prices are still up 1.6% from March last year. 

In this months update, we'll be giving a overview of the UK mortgage market. 
We'll also be covering New Build purchases and how they differ from a second hand properties.

Latest News

March saw a much needed, calm market environment. Inflation reduced to 3.4% which was a welcome drop.


When the Monetary Policy Committee met to review the the Bank of England base rate, they decided to remain at 5.25%. This is the 5th successive hold on the base rate and is simply because we are seeing progress in the battle with inflation but not enough to make any moves to reduce interest rates. 

Sentiment is positive though, and many are predicting a reduction in the coming months. 

On April 1st the Bank of England reported that net mortgage approvals hit their highest levels in 17 months which is really positive, it shows that lenders are welcoming a good breadth of borrowers and that applications have increased. 

So, all data points to a very gentle release from the toughest moment of this economic crisis. 

We're also seeing new incentives for first time buyers entering the market. Accord, an arm of Yorkshire Building Society, have just launched an initiative for first time buyers that will allow for a minimum deposit of £5,000 with a purchase price of up to £500,000.

This is removes a huge barrier for first time buyers to enter the market. It's good to see lenders being creative and providing opportunities for first time buyers to purchase their first homes now that help to buy is over. 

Mortgage Rates Today

What is so different about a new build purchase?  


With Help to Buy long gone and with supply and weather issues, new builds have had a bit of a tough run of it. 

New build properties are considered slightly differently by lenders. Part of the appeal of new build properties are the brand new appliances, fresh paint, new carpets and personalised décor. 

Once an owner has moved in, these features lose their shine. This is why new builds tend to see a small drop in value soon after their purchase. 

Because of this, lenders see these properties as a higher risk and tend to require a higher deposit upfront. Usually a minimum of 10% deposit for a new build house (second hand houses are 5% standard) and new build flats at 15% standard. (second hand flats are standard at 10%)

This is a generalisation of course, as different lenders have different options available, Skipton for example will allow for a 5% deposit on a a new build flat and so it's always worth speaking with a broker throughout your search to check these details. 

There are a couple of other things you'll need to keep in mind: 

  • Builder Incentives over 5% of the purchase price, this could be discounts, paid stamp duty etc can require the purchase price to be reduced by the residual amount above 5%. This will affect the level of lending available and so will affect your upfront costs. 

  • New Build affordability can differ to second hand properties and offer a lower maximum affordability level, this is worth checking early on. 

  • Because of the nature of building a property, the standard mortgage offer validity of 6-months may not be adequate. Many lenders offer new build specific products with a longer offer validity period, it's worth being aware of this. 

If you do need to discuss any aspect of obtaining your own mortgage, please do always feel free to get in touch,   

Jen Boulter

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