The average rate for a two-year fixed mortgage dropped marginally to 4.68% from 4.69% last week, according to data from Uswitch

HSBC, Halifax and Barclays were the three major lenders to cut mortgage rates this week, despite uncertainty over what could be announced in the upcoming autumn budget.

The average rate for a two-year fixed mortgage dropped marginally to 4.68% from 4.69% last week, according to data from Uswitch. The average five-year fixed deal rose to 5.05% from 5.03%. Those are the average rates on a 75% loan-to-value (LTV) mortgage, meaning buyers need to have at least 25% for a deposit.

Data released on Wednesday showed that UK inflation dropped for the first time five months, sliding to 3.6% on annual basis, raising hopes that the Bank of England (BoE) will lower interest rates in December. The central bank’s base rate influences those set by lenders so another rate cut would be welcome news for mortgage borrowers.

Alice Haine, personal finance analyst at online investment platform Bestinvest by Evelyn Partners, said: Softer inflation offers some room for optimism for homeowners and prospective buyers, particularly if it paves the way for a sixth interest rate cut since August last year – a move that should ease borrowing costs further.

She pointed out that buying a home has already become more expensive for movers this year, as stamp duty thresholds – the point at which people start paying the property purchase tax – reverted back to their previous lower level £125,000 in April, down from £250,000.

With further tweaks to property taxes potentially on the cards in the budget – including a proposal to add an extra levy on homes in the highest three council tax bands and extending national insurance to landlords – buyers and sellers are either delaying plans until after the announcement or accelerating deals to complete beforehand, she said.

Rightmove research released on Thursday showed that nearly a fifth (17%) of potential movers said they had paused their plans due to uncertainty about changes to property taxes in the budget, which chancellor Rachel Reeves is due to deliver on 26 November.

At the same time, Bestinvest’s Haine said that easing inflation bodes well for affordability, given it raises the likelihood of further rate cuts.

Mortgage rates have continued to fall in recent days, so a more competitive mortgage landscape, combined with more relaxed stress test rules and slowing market activity ahead of the budget, provides an opportunity for committed buyers to capitalise, she said.

She added: When a market hesitates in the face of change, it can be one of the best times to secure a deal.