(Bloomberg) -- The cost of a five-year fixed-rate mortgage in the UK has dropped below 6% for the first time since the start of July, providing a glimmer of hope for Britons reeling from the UK’s home loans crunch.

The average five-year fixed-rate mortgage dropped to 5.99% on Thursday, a week after the Bank of England halted the most aggressive cycle of interest rate increases in more than three decades. The average two-year fixed-rate deal dipped to 6.5%, a threshold it breached almost three months ago, according to Moneyfacts Group Plc.

Read more: London Pushes UK Home Price Cuts to Biggest Since 2019

The UK housing market is under pressure from a triple whammy of pricey borrowing, economic uncertainty and the worst cost-of-living crisis in a generation. A report released Thursday by KPMG showed almost a quarter of British mortgage holders are considering selling and moving to a cheaper property due to the surge in financing costs. 

Homeowners and would-be buyers were offered some respite last week after inflation retreated and the BOE paused a series of interest rate hikes. The highest benchmark lending rate since 2008 is forcing almost a fifth of mortgage holders to use savings to cover home loan costs, the KPMG report said.

Read more: UK Homeowners Say Jump in Interest Rates Will Force More to Sell

Still, Zoopla only sees the number of homebuyers increasing when mortgage rates fall toward 4.5%. The property portal says house prices are not dropping fast enough to make homes more affordable, with higher mortgage rates reducing buying power by more than 20% compared to early 2022, according to separate research published Thursday.

“The modest fall in prices is not enough to improve affordability to a level that will boost activity,” Richard Donnell, Zoopla’s executive director, said in the report. “Falling mortgage rates are the most likely route to improving housing affordability, and bringing buyers back into the market in the next 12 to 18 months.”

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