As the year draws to a close, Mojo Mortgages, a leading UK mortgage broker, is reflecting on the transformative changes in the mortgage market throughout 2024.
Mojo Mortgages recently launched an annual initiative, ‘Mortgages Wrapped’, which provides a comprehensive look back at the trends and insights that defined the year.
With the first drop in the Bank of England’s base rate since March 2020, the market was marked by volatility, rising payments, and shifting trends.
Homeowners who had locked in favourable fixed-rate deals were particularly impacted as their contracts ended, and interest rates fluctuated throughout the year.
First-time buyers still a growing market despite challenges
2024 saw a notable surge in first-time buyers seeking assistance, with Mojo Mortgages reporting a 20% increase in this demographic.
More than half (50.8%) of these first-time buyers were aged between 25 and 34, reflecting the national average first-time buyer age of 33 years and 8 months.
Interestingly, a surprising 5% of first-time buyers were aged between 51 and 64, showing that it’s never too late to step onto the property ladder.
Despite the financial challenges, these buyers were adapting to the market, with the average deposit decreasing by 6.1% to £54,894, while loan amounts increased by 5.8% to £221,309.
The average mortgage term also lengthened slightly, increasing from 29 years and 4 months to 29 years and 11 months.
Remortgaging on a 14% rise
Mojo Mortgages also saw a significant uptick in remortgaging activity, with 14% of their customers remortgaging specifically to fund home improvements.
This indicates that many homeowners are creatively using their property equity to enhance their living spaces.
Almost half (48%) of remortgagers opted for product transfers with their existing lender, while 52% switched lenders to secure potentially better rates.
‘95% opt for fixed-rate mortgages’
One of the most significant trends in 2024 was the overwhelming preference for fixed-rate mortgages.
A staggering 95% of Mojo Mortgages’ customers opted for fixed-rate products, highlighting the need for stability in uncertain times.
Of those opting for fixed rates, more than two-thirds (68.8%) selected 2-year fixed-rate mortgages, appreciating the balance of lower rates and flexibility.
Autumn proved to be the busiest period for mortgage activity, with over a third (36.4%) of all approved mortgages occurring in the season.
What do mortgages look like for 2025?
John Fraser-Tucker, Head of Mortgages at Mojo Mortgages, reflected on the year’s challenges and resilience. He noted that while 2024 brought fluctuating mortgage rates, with 2-year fixed rates ranging from 4.5% to 5.3% and 5-year fixed rates between 4.1% and 4.9%, homebuyers adapted by extending mortgage terms to near 30 years.
“Stability and long-term planning remain top priorities for homeowners,” Fraser-Tucker said. “At Mojo, we’re ready to help customers navigate these changes and find the best mortgage solutions for their needs in the year ahead.”
Looking to the future, Fraser-Tucker anticipates a busy early 2025, particularly as recent budget measures are expected to reduce competition from landlords.
This could open up opportunities for first-time buyers, especially with changes to Stamp Duty Land Tax (SDLT) rates due on 1st April.
As a result, Mojo Mortgages expects to see a surge of activity in the first quarter as buyers rush to complete purchases before new rules take effect.