Mojo Mortgages has launched ‘Mortgages Wrapped’ – an annual initiative offering a detailed snapshot of the trends and insights that defined the UK mortgage market in the current year.
In 2024, the mortgage market experienced significant shifts.
For the first time since March 2020, the Bank of England reduced its base rate, offering relief to some borrowers.
However, many homeowners still felt the pinch as fixed-rate deals from pre-2022 ended, leading to higher monthly payments.
ROLLERCOASTER YEAR
John Fraser-Tucker, Head of Mortgages at Mojo Mortgages, says: “What a rollercoaster 2024 has been for the UK mortgage market.
“We saw the first Bank of England base rate drop since March 2020, which initially brought some relief.
“However, many homeowners still faced steep payment increases as pre-Liz Truss fixed-rate deals came to an end.
“Mortgage rates fluctuated throughout the year, with 2-year fixed rates ranging from 4.5% to 5.3%, and 5-year fixed rates between 4.1% and 4.9%.
“Despite these challenges, we’ve seen remarkable resilience from homebuyers. The number of first-time buyers we helped increased by 20% this year, with many adapting to affordability issues by opting for longer mortgage terms – now averaging nearly 30 years.
“It’s also fascinating to see 5% of first-time buyers in the 51-64 age bracket, proving it’s never too late to get on the property ladder.
FIRST-TIME BUYERS
Mojo Mortgages supported a fifth more first-time buyers in 2024 seeing 20% growth in the demographic.
Over half (50.8%) of those were aged 25-34, aligning with the UK’s average first-time buyer age of 33 years and 8 months. Notably, 5% of first-time buyers were aged 51-64.
The average first-time buyer deposit fell by 6.1% to £54,894, while average loan amounts increased by 5.8% to £221,309. To manage affordability, mortgage terms lengthened slightly to nearly 30 years.
EQUITY FOR UPGRADES
Some 14% of remortgaging customers used funds for home improvements, highlighting homeowners’ focus on enhancing their living spaces.
And while 48% opted for product transfers, 52% switched lenders for better deals.
FIXED IT FOR YOU
A striking 95% of Mojo Mortgages’ customers sort stability and chose fixed-rate deals.
Among these, 68.8% selected 2-year fixed-rate options for flexibility.
Meanwhile Autumn emerged as the busiest period, accounting for 36.4% of approved mortgages.
Looking ahead to 2025 Fraser-Tucker adds: “The autumn budget measures and changes to Stamp Duty Land Tax (SDLT) from April 1st could fuel a surge in early-year activity.
“With landlords likely facing reduced competition, first-time buyers may find more opportunities to enter the market.”
