Britain’s homebuyers are entering the festive period in a stronger position than a year ago, as greater mortgage choice and falling rates improve affordability despite the absence of housing support measures in the Autumn Budget.
New analysis from mortgage broker Alexander Hall shows that borrowers across all segments of the market now have access to more products at lower average rates than last Christmas, easing monthly repayment costs at a time of continued pressure on household finances.
The study assessed current mortgage availability, average rates and borrowing costs compared with December last year.
It found that product numbers have risen across the board, with the largest increase seen in the buy-to-let sector.
BUY-TO-LET BOOST
And despite regulatory changes over the past year, including the introduction of the Renters’ Rights Act, the number of buy-to-let mortgage products has increased by 68% year on year.
First-time buyers have also seen a marked improvement, with mortgage choice up 23%, while remortgagers and home movers have benefited from smaller increases of 5% and 3% respectively.
FALLING COSTS
Borrowing costs have fallen across all borrower types. Average buy-to-let mortgage rates are down by 0.77% compared with December 2024.
First-time buyers are paying around 0.6% less on average, while rates for home movers and remortgagers have fallen by 0.42% and 0.34%.
Alexander Hall estimates that for a buyer purchasing at the current average UK house price of £272,998 with a 15% deposit, the average monthly repayment on an 85% loan-to-value, 2-year fixed mortgage has fallen to £1,255, compared with £1,323 a year ago.
The £68 monthly saving equates to £1,640 over the fixed term, offering a modest but meaningful improvement in affordability as the housing market heads into 2026.
FAVOURABLE CONDITIONS
Richard Merrett, Managing Director of Alexander Hall, says: “While the Autumn Budget may have disappointed buyers hoping for direct support, the reality is that market conditions this Christmas are considerably more favourable than they were a year ago.
“We’ve seen a steady expansion in mortgage product availability and a meaningful reduction in rates across every major borrower group and, for the average homebuyer, this translates into lower monthly repayments and greater flexibility when choosing a mortgage.”
And he adds: “What’s more, we’re now seeing clear affordability improvements from an income-to-lending perspective.
ENCOURAGING OUTLOOK
“Many major lenders have strengthened their affordability assessments over recent months, allowing borrowers to access higher loan amounts than were possible a year ago. For buyers, that means more choice, greater purchasing power, and a better chance of securing the home that truly meets their needs.
“The outlook remains encouraging and as we move into 2026, we expect improved mortgage affordability to continue supporting confidence and stability across the property market.”
