Mortgage Market News 2025

Mortgage News – 20th October 2025

This week, mortgage rates increased for the first time in eight months, while swap rates dipped slightly but remained higher than this time last year. The government announced sweeping planning reforms to speed up housebuilding, as house prices held steady in September and October saw only a small 0.3% rise in asking prices. Meanwhile, the economy showed weak growth, and new insights revealed more first-time buyers are overpaying their mortgages, while loft conversions continue to add strong value to homes.

Mortgage Rate & Criteria Changes

Clydesdale Bank increased the maximum loan-to-value to 75% on interest-only and part-and-part residential mortgages, refreshed affordability criteria to support higher borrowing for employed and self-employed applicants, launched new 85% LTV residential products, and updated its free valuation offer to cover properties valued up to £3 million.
Barclays updated its income assessment criteria to enhance affordability by including 100% of overtime, commission, and bonus income for mortgage applicants, supporting higher borrowing potential across a wider range of employment types, and also increased rates across its Existing Customer range.
Paragon Bank launched limited edition 75% LTV buy-to-let mortgage products, with rates starting from 3.29%.

Mortgage Rates Edged Up for the First Time in Eight Months

Average mortgage rates rose last week, marking the first upward movement in eight months. The average two-year fixed rate increased to 5.93%, a rise of 0.04%, while the five-year fixed rate climbed by 0.05% to 5.50%. These changes reflect shifting market sentiment amid persistent inflation and renewed base rate speculation.

Government Pledges Radical Planning Reforms to ‘Get Britain Building’

The government announced a series of radical planning reforms aimed at accelerating housing delivery and unlocking economic growth. Measures include fast-tracking planning for brownfield sites, streamlining application processes, and introducing automatic approvals in key urban areas. The reforms are intended to reduce delays, boost supply, and support wider regeneration objectives across the country. Gov: Pro-growth package unshackling Britain to get building

House Prices Steady in September as Market Awaits Budget Clarity, Says e.surv

House prices remained broadly stable in September, reflecting a pause in activity as buyers and sellers awaited further clarity ahead of the Autumn Budget. According to e.surv, average property values showed little movement, with market sentiment influenced by ongoing speculation around potential tax changes. The data suggested a holding pattern in the housing market as participants exercised caution.

BoE Policymaker Signals Rate Cut Potential as Trade Diversion Eases Inflation Pressures

A Bank of England policymaker indicated that a future rate cut may be possible as trade diversion effects help to ease inflationary pressures. The shift in trade flows post-Brexit has reportedly lowered import costs, contributing to improved price stability. This development has added weight to market expectations of a potential reduction in the base rate in the coming months.

Two-Thirds of First-Time Buyers Make Mortgage Overpayments, Says TSB

New research from TSB revealed that 66% of first-time buyers have made mortgage overpayments, aiming to reduce interest costs and repay their loans faster. Many cited rising income and cautious financial planning as key motivations behind their decision to overpay. The findings suggest a shift in borrower behaviour, with new homeowners prioritising long-term savings over short-term spending. One-in-six hope to be mortgage free by age 40 – as over two-thirds make overpayments

Loft Conversions Boost Home Value by Up to 24%, Nationwide Research Shows

Nationwide’s latest research found that adding a loft conversion with a bedroom and en-suite can increase a property’s value by as much as 24%. The uplift was most significant in high-demand areas and for homes where space was already at a premium. The findings highlight the financial benefit of extending upwards rather than relocating. Loft it up: attic bedrooms can boost the price of a home by a quarter

UK GDP Edges Up 0.1% in August as Services Stall and Construction Slips

The UK economy grew by just 0.1% in August, as gains in production were offset by flatlining services and a decline in construction activity. ONS data showed a fragile recovery, with the services sector – which makes up the largest part of the economy – showing no growth for the month. Meanwhile, construction output fell, reflecting ongoing weakness in the housing and infrastructure sectors. GDP monthly estimate, UK: August 2025

RICS Releases Information Paper on Flooding and Property

The Royal Institution of Chartered Surveyors (RICS) published a new information paper to help property professionals better assess and manage flood risks. The guidance outlines how flooding impacts property valuation, lending decisions, and due diligence, aiming to promote consistent standards across the sector. It also includes practical advice on mitigation measures and long-term resilience planning. RICS releases new insight paper on flooding and property

New Seller Asking Prices Up Just 0.3% in October – Rightmove

Rightmove reported that new seller asking prices rose by only 0.3% in October, reflecting a cautious market amid economic uncertainty. The modest monthly increase suggests sellers are pricing conservatively to attract buyers in a competitive environment. Despite the slowdown, more listings and stable buyer demand kept activity steady across many regions.

Swap Rates Fall Week-on-Week Despite Yearly Gains

Swap rates dropped over the past week, with the 2-year rate falling by 0.160% to 3.572% and the 5-year rate down 0.201% to 3.617%. Both rates are now lower than they were last month, though still higher than the same time last year, reflecting ongoing volatility in market expectations. The 2-year rate remains 0.315% below last year’s figure, while the 5-year rate is only 0.052% lower.

Swap Rate	16-Oct-25	17-Sep-25	17-Oct-24
2 Year	3.572%	3.697%	3.887%
5 Year	3.617%	3.732%	3.669%

Updated 17th October 2025

Mortgage News – 13th October 2025

This week’s market update shows a mixed picture. House prices dipped slightly in September, but overall the market remained steady, while landlords in Wales saw the strongest rental returns in the UK. At the same time, concerns around the upcoming Budget continued to slow activity, and lenders made more changes to support affordability.

Mortgage Rate & Criteria Changes

Aldermore updated its residential affordability criteria, increasing maximum loan amounts for employed applicants with good credit by reducing assumed outgoings and enhancing income multiples.
Barclays enhanced its mortgage policies by increasing loan-to-income caps from 4.49x to 5.5x for certain applicants and updated affordability assessments to improve borrowing capacity for homebuyers.
Buckinghamshire Building Society reduced rates on its Credit Revive and Credit Restore mortgage ranges by up to 0.20%.
Newcastle for Intermediaries introduced new product transfer rates specifically for existing interest-only mortgage customers.
HSBC UK introduced top slicing on its buy-to-let range, allowing landlords to use surplus earned income alongside rental income to support affordability assessments.
The Mortgage Works launched new 2- and 5-year fixed rate buy-to-let products for limited company landlords up to 75% LTV, while The Mortgage Lender reduced buy-to-let rates and introduced a £750 cashback incentive on selected 5-year fixed deals.
Aldermore launched limited edition mortgage products across its residential and buy-to-let ranges, featuring new 2- and 5-year fixed rates available up to 80% LTV.

Halifax Reports Slight September House Price Dip as Market Remains Stable

Halifax reported a 0.4% decline in UK house prices in September, bringing the average property value to £278,601. Despite the monthly dip, annual price growth stood at 0.1%, indicating relative stability in the housing market. Halifax noted that while activity remained subdued, affordability improvements and easing mortgage rates continued to support buyer confidence. September 2025 Halifax House Price Index

Wales Leads UK for Rental Yields as Paragon Bank Reports Strong Q3 Performance

Paragon Bank reported that Wales achieved the highest average rental yields in the UK during Q3, reaching 7.3% across its buy-to-let portfolio. The strong performance was driven by high tenant demand and relatively low property prices, particularly in South Wales. The lender also noted that landlords operating in Wales were more likely to hold energy-efficient properties, which contributed to resilient rental returns.

eXp UK Launches Commercial Property Division

eXp UK expanded its operations by launching a new commercial property division, marking its first formal entry into the sector. The division will focus on areas including industrial, office, retail, and leisure, with services aimed at private investors, institutions, and developers. This strategic move aims to broaden the company’s footprint and provide additional growth opportunities for its network of agents.

House Prices and Sales Drop as Budget Uncertainty Stalls Market – RICS

The latest RICS Residential Market Survey revealed a continued decline in house prices and buyer demand during September, as political and economic uncertainty weighed on sentiment. Surveyors cited the upcoming Autumn Budget as a key source of caution, with many buyers and sellers delaying decisions until fiscal policy becomes clearer. Sales volumes and new instructions both fell, extending the subdued market conditions seen in recent months. RICS UK Residential Survey September 2025

Pepper Money Warns of Rising Credit Card Strain as One in Four Homeowners Miss Payments

Pepper Money highlighted growing financial pressure on households, revealing that one in four homeowners had missed a credit card payment in the past six months. The lender attributed the trend to ongoing cost-of-living challenges and elevated interest rates, which are stretching budgets and increasing reliance on unsecured credit. It warned that this could affect mortgage affordability assessments and the financial resilience of borrowers.

Buying a Home with a 5% Deposit Cheaper Than Renting in Most Cities – Lloyds

Research from Lloyds Bank showed that in over half of UK cities, monthly mortgage payments for first-time buyers putting down a 5% deposit were lower than the equivalent rent. The analysis covered 32 major cities and found average monthly savings of £106 for homeowners compared to renters, driven by stable mortgage rates and rising rental costs. This affordability gap has made buying a more attractive option for many despite high property prices.

Swap Rates Edge Lower Across 2- and 5-Year Terms

Swap rates declined slightly over the past week, with the 2-year rate falling to 3.732%, down 0.017% from 3.715%, and the 5-year rate easing to 3.818%, a 0.028% drop from 3.790%. Compared to last month, the 2-year rate is down by 0.054%, while the 5-year rate has fallen by 0.095%. Year-on-year, the 2-year rate remains 0.300% higher, while the 5-year rate is marginally lower by 0.022%.

Swap Rate	09-Oct-25	10-Sep-25	10-Oct-24
2 Year	3.732%	3.678%	4.032%
5 Year	3.818%	3.723%	3.796%

Updated 6th October 2025

Mortgage News – 6th October 2025

The mortgage market stayed fairly steady over the past few weeks, with some clear shifts in borrower behaviour. Remortgaging hit its highest level this year, while demand for homes over £500,000 slowed down due to uncertainty around possible tax changes. House prices remained stable, mortgage approvals dipped slightly, and swap rates moved up just a touch.

Mortgage Rate & Criteria Changes

Gen H launched part and part mortgages for buyers with a 5% deposit, expanding options for those seeking a blend of interest-only and repayment borrowing.
Clydesdale Bank launched new variable mortgage rates starting from 4.99% and withdrew a selection of existing fixed and tracker products from its offering.
Coventry for Intermediaries updated its lending criteria to allow more flexible income types, employment situations, and enhanced support for joint borrower sole proprietor applications.
HSBC reduced rates across its residential and remortgage ranges but increased pricing on selected buy-to-let products.
West Brom Building Society reduced mortgage rates across its purchase and remortgage product ranges.
Accord Mortgages reduced rates across its residential mortgage range.
Principality Intermediaries adjusted rates across its mortgage offering, with changes affecting selected residential and buy-to-let products.
Family Building Society launched new expat buy-to-let products available through limited companies, targeting landlords based overseas.
Aldermore launched new limited edition buy-to-let products and reduced rates across its residential mortgage range.
Moda Mortgages launched limited edition 80% LTV products, including an option with a 5% fee to offer more pricing flexibility for borrowers.

Speculation Over Budget Changes Slows £500k+ Market – Zoopla

Housing demand for properties priced above £500,000 declined in recent weeks, as uncertainty around potential government tax changes ahead of the Autumn Statement led buyers to delay decisions. According to Zoopla, this high-value segment experienced a slowdown despite stable demand in the broader housing market. In contrast, the lower-value market remained active, supported by affordability-focused mortgage products and increased buyer interest in affordable regions. Zoopla – House Price: Index September 2025

Remortgages Made Up Nearly Half of September Mortgage Searches

Remortgage activity surged in September, accounting for 49% of all mortgage searches on the Twenty7Tec platform. This marked the highest share of remortgage-related searches in 2025 so far, reflecting shifting borrower priorities amid interest rate expectations. Home purchase searches declined in contrast, indicating a more cautious stance from prospective buyers.

Nationwide Reports Stable 2.2% Annual House Price Growth in September

Nationwide reported that UK house prices rose by 2.2% annually in September, maintaining the same rate of growth seen in August. Month-on-month, prices edged up slightly by 0.1%, reflecting a stable but cautious housing market. The report highlighted steady demand and limited supply as key factors supporting current price levels. Annual house price growth steady in September 2025

Property Transactions Fell by 2% in August, Says HMRC

HMRC data showed a 2% decline in UK residential property transactions in August compared to July, continuing a subdued trend in market activity. Seasonally adjusted figures indicated 87,010 completions during the month, down from 88,840 in July. Year-on-year, transactions were 16% higher, reflecting a recovery from weaker levels seen in 2024. HMRC – UK monthly property transactions commentary: 30 September 2025

Mortgage Approvals Fell by 0.7% in August – BoE

Bank of England data showed a 0.7% decrease in mortgage approvals in August, totalling 59,030 compared to 59,436 in July. This marked the second monthly decline, suggesting a cautious approach from borrowers amid ongoing rate uncertainty. Despite the dip, approvals remained above levels seen earlier in the year, indicating some underlying market resilience. BOE: Money and Credit – August 2025

Swap Rates Edge Up Slightly as Market Holds Steady

Swap rates showed minor movement over the past week, with the 2-year rate rising to 3.715%, a 0.011% increase from last week’s 3.726%. Compared to one month ago, the 2-year rate was down slightly by 0.004%, though still 0.120% higher than the same time last year. The 5-year swap rate also ticked up to 3.790%, rising 0.020% on the week, but down marginally by 0.001% from last month and 0.203% lower than a year ago.