In the realm of real estate and economic indicators, the fall season is not only witnessing the descent of leaves, but also a noteworthy decline in mortgage rates. 

The average rate for two-year fixed-rate mortgages has fallen below 6% for the first time since the middle of June, data from Moneyfacts shows. 

The rate fell to 5.99% today, from 6.01% yesterday. It is the first time the rate has been below 6% since 19 June. 

While five-year residential fixes fell to 5.60%, from 5.61% the previous day, says the data group. 

The move follows the Bank of England’s Monetary Policy Committee holding the base rate at 5.25% in November for its second meeting in a row, as it battles inflation at 4.6%. 

This has given lenders confidence to bet that the BoE’s rate-raising cycle has come to an end for now and begin lowering home loan rates. 

Economists are speculating that the MPC will hold rates for the third successive time at its next meeting next Thursday. 

With no real surprises over the last four weeks and inflation and pay growth have slowed something Rishi Sunak PM highlighted as one of his long-term pledges. 

No one should expect a cut in the base rate until the second half of next year. 

With high street peaking at 6.86% in late July, rates have been gently falling since early August due to a combination of factors including falling inflation, base rate pauses, and reductions in swap rates. 

It remains to be seen if the recent rate reductions will continue, as any further rises in inflation, base rate, or swap rates may lead to a reversal. 

In June there were 54,700 mortgage approvals for new purchases, according to official figures. But by October this fell to 47,400. 

There is a chance lower rates could encourage approvals to pick up, which would boost the property market in the coming months. 

The markets will not see the impact of lower mortgage rates until the spring at least. 

This could help bring a chunk of buyers back to the market. It would be the remedy for the agony suffered by sellers over the past few months, as their properties sit unseen on the market and there for-sale signs collect grime. 

Historically In the past year, mortgage movements have tended to take around three or four months to feed into the official house price figures – partly because of the time it takes to complete a sale. 

Sales figures for the rest of the year are likely to reflect higher mortgage rates over the summer and autumn, which are unlikely to be particularly spectacular. 

So, with an election looming and more overseas constraints a rainbow has emerged, and it is worth capitalising on. 

Author: Masud Khan