The consumer body Which? says base rate is expected to fall to 4.0% by the end of next year.
The group, in a forecast for the year ahead, says mortgage rates became slightly more affordable thanks to two base rate cuts in 2024.
The average rate on a two-year fix fell from 5.93% to 5.62% over the course of 2024, and borrowers should expect more substantial drops in the new year, it predicts.
“The base rate, currently 4.75%, is projected to fall to around 4% by the end of 2025. This could result in the cheapest two-year fixes falling from the current rate of 4.2% to around 3.5%” says the consumer body.
Its other predictions for 2025 include higher rents thanks to the long-term sell off of buy to let properties by landlords, house prices to go slightly higher, first time buyers to still struggle with affordability, and the early part of the year to see a frantic housing market as first timers seek to beat the stamp duty change deadline in April.
You can see the full Which? prediction here. https://www.which.co.uk/news/article/11-house-price-and-mortgage-predictions-for-2025-aWAm63L8xlwM