Mortgage Market News 2025

Mortgage News – 28th July 2025

It was a relatively quiet week for mortgage news, with only a few rate adjustments and criteria changes aimed at improving affordability. Gen H and Skipton introduced notable LTI enhancements to support self-employed and first-time buyers, while minor pricing updates came from Vida, Landbay, and Principality. Wider market data highlighted a sharp seasonal drop in property searches and asking prices, increased buy-to-let lending in Q1, and a small weekly fall in swap rates despite modest monthly growth.

Mortgage Rate & Criteria Changes

Principality Intermediaries reduced selected residential fixed rates by up to 0.20% and increased selected buy-to-let fixed rates by up to 0.10%.
Gen H increased LTI limit to 5.5 for self-employed applicants and removed the 4.49 cap for loans over 85% LTV.
Landbay reduced selected buy-to-let fixed rates by up to 0.44% with the launch of its summer special product range.
Vida Homeloans reduced buy-to-let rates by up to 0.51% and residential rates by up to 0.54%.
Skipton Building Society increased LTI limits for first-time buyers, allowing borrowing up to 5.49 times income on selected mortgages.

Property searches fell 17.89% in summer 2025, marking steepest recent decline

Twenty7tec reported a 17.89% drop in property searches between 21st June and 21st July 2025, over four times steeper than the same period in 2024. Every price band experienced a double-digit fall, with the sharpest declines in the £250,000–£300,000 range and homes priced over £500,000. Despite this, demand for mid-market family homes remains resilient, indicating a refocus of buyer interest.

New asking prices fall to lowest July level in over two decades

Rightmove reported that average new seller asking prices in July 2025 dropped to their lowest level for the month in over 20 years. The average asking price fell by 0.2% (£905), reflecting softer market conditions as affordability pressures weigh on buyer demand. Despite the seasonal summer slowdown, this year’s dip was more pronounced than usual, signalling growing caution among sellers. Rightmove: House prices see biggest July drop in over 20 years

98% of Lifetime ISA holders dependent on government bonus for home purchase

Research from Atom bank revealed that 98% of Lifetime ISA (LISA) holders rely on the 25% government bonus to help buy a home, with nearly half being “very reliant.” Many savers expressed dissatisfaction with the £4,000 annual limit, calling for it to be raised, and a majority also want the early withdrawal charge reduced or removed. The findings underscore concerns that, despite its popularity, the LISA may be outdated given rising house prices and affordability issues.

Buy-to-let market surged in Q1 2025 with lending and investor confidence on the rise

UK Finance reported that the buy-to-let mortgage market experienced strong growth in Q1 2025, with 58,347 new loans totalling £10.5bn, up 38.6% in number and 46.8% in value year-on-year. The average interest rate on new BTL loans fell to 4.99%, while gross rental yields edged up to 6.94%. Fixed-rate products gained popularity as landlords moved away from variable-rate deals, and arrears decreased, though repossessions saw a notable rise. UK Finance: Buy to let lending Q1 2025

Equity release market released £636m in property wealth in Q2 2025

The Equity Release Council reported that £636m was accessed through equity release products in Q2 2025, marking a 7% increase compared to the previous quarter. This total came from 15,448 new and returning customers, reflecting growing confidence in using property wealth to support retirement and other financial needs. While the market remains below pre-2023 levels, activity has been steadily climbing throughout the first half of the year. Council publishes Q2 Lending figures 2025

Swap rates dipped slightly over the past week but remain higher than last month

Swap rates showed minor declines this week, with the 2-year rate falling by 0.023% to 3.623% and the 5-year rate down by 0.024% to 3.701%. Compared to last month, both rates have risen slightly, with the 5-year swap rate increasing by 0.052% and the 2-year by 0.007%. However, both rates remain below their levels from the same time last year, particularly the 2-year rate, which has dropped by 0.682%.

Swap Rate	24-Jul-25	25-Jun-25	25-Jul-24
2 Year	3.623%	3.616%	4.305%
5 Year	3.701%	3.649%	3.842%

Updated 28^th July 2025

Mortgage News – 21st July 2025

This week saw a clear focus on improving mortgage affordability and accessibility, particularly for first-time buyers and those needing higher levels of borrowing. Lloyds, Nationwide and Coventry Building Society introduced key changes aimed at increasing borrowing capacity, while the government confirmed the permanent launch of its ‘Freedom to Buy’ scheme to support low-deposit lending. Swap rates ticked up slightly and a surprise rise in inflation has added further uncertainty around the timing of a base rate cut.

Mortgage Rate & Criteria Changes

Halifax Intermediaries reduced fixed rates for homemovers and first-time buyers.
Santander reduced mortgage rates across its residential and buy-to-let ranges.
Coventry for Intermediaries reduced residential rates by up to 0.16%.
Accord reduced buy-to-let rates for the second time this week.
The Mortgage Works reduced buy-to-let switcher rates for existing customers.
Foundation Home Loans enhanced its residential mortgage range with improved criteria and broader product availability.
Pepper Money launched ‘Pepper Flex’, a new product designed to support borrowers with complex financial situations.

Lloyds Sets Aside Additional £4bn for High LTI Mortgage Lending

Lloyds Banking Group increased its allocation for high loan-to-income (LTI) mortgage lending by £4bn, signalling a strategic push to capture a larger share of the mortgage market. The group has now committed £22bn to lending above the 4.5 times income threshold, which is the regulatory cap for most borrowers.

Nationwide Expands 6x LTI Mortgage Range for First-Time Buyers Following Regulatory Changes

Nationwide Building Society extended its 6x loan-to-income (LTI) mortgage range for first-time buyers, following the regulator’s decision to ease restrictions on high-LTI lending. The expanded range will now be available to more borrowers who meet affordability checks, particularly targeting those with higher incomes.

Coventry BS Updates Stress Testing, Allowing Buyers to Borrow £35k More

Coventry Building Society revised its mortgage stress testing criteria, enabling some borrowers to access up to £35,000 more in lending. The change comes as part of a broader move to reflect current market conditions and help buyers maximise their affordability.

Government Confirms Launch of Permanent ‘Freedom to Buy’ Mortgage Scheme

The government confirmed the introduction of the permanent ‘Freedom to Buy’ mortgage guarantee scheme, set to replace the current version that was due to end in June 2025. This initiative aims to help more first-time buyers purchase homes with just a 5% deposit, by offering lenders a partial government guarantee on high loan-to-value mortgages. The scheme is part of a wider plan to increase home ownership and provide long-term stability for aspiring buyers.

Panorama Exposes Pressure Tactics at Connells and Purplebricks

A BBC Panorama investigation revealed that estate agents at Connells and Purplebricks were allegedly pressured to push buyers towards in-house mortgage advisers, regardless of the buyers’ preferences. Secret recordings captured staff being instructed to delay or restrict viewings for buyers not using their mortgage services. Both firms have since stated they are reviewing their practices and prioritising compliance with regulations.

August Rate Cut in Jeopardy as Inflation Rises to 3.6%

UK inflation unexpectedly rose to 3.6% in June, up from 3.4% in May, casting doubt over the likelihood of an interest rate cut in August. The increase was driven by rising costs in services, which offset easing pressures in other areas such as food and energy. This surprise jump has prompted markets to reassess expectations for near-term monetary policy changes by the Bank of England.

Swap Rates Edge Higher Over the Past Week, Remain Below Yearly Highs

Swap rates rose slightly over the past week, with the 2-year rate increasing by 0.039% to 3.646% and the 5-year rate climbing by 0.052% to 3.725%. Compared to last month, the 2-year rate dropped by 0.022%, while the 5-year rate saw a modest gain of 0.051%. Both rates remain below their levels from the same time last year, with the 2-year rate down 0.667% and the 5-year down 0.084%.

Swap Rate	17-Jul-25	18-Jun-25	18-Jul-24
2 Year	3.646%	3.668%	4.313%
5 Year	3.725%	3.674%	3.809%

Updated ^21stJuly 2025

Mortgage News – 14th July 2025

Lenders continued to reduce mortgage rates last week, with cuts of up to 0.49% from major banks and building societies across residential, buy-to-let, and specialist ranges. Clydesdale Bank and Metro Bank introduced criteria updates to support self-employed borrowers and landlords, while Halifax reported that UK house prices held steady in June with annual growth of 2.5%. The PRA also introduced temporary flexibility to the loan-to-income cap to encourage lending to first-time buyers. UK GDP shrank by 0.1% in May, the second monthly contraction, while construction output dropped 0.6% after previous growth. Swap rates rose slightly over the week, with the 2-year at 3.607% and the 5-year at 3.673%, though both remain down on an annual basis.

Mortgage Rate & Criteria Changes

Nationwide reduced selected 2-, 3-, and 5-year fixed mortgage rates by up to 0.20% across products for first-time buyers, remortgages, switchers, and additional borrowing up to 95% LTV.
Santander reduced rates by up to 0.16% on remortgage products between 60% and 75% LTV.
HSBC reduced rates across residential, buy-to-let, and international products for the third time in two weeks, with changes covering up to 95% LTV and multiple buyer types including FTBs, home movers, remortgages, high value, and energy efficient homes.
Barclays reduced rates twice this week across residential, buy-to-let, and large loan products, with cuts of up to 0.49% then again by up to 0.15% across purchase, remortgage, and existing customer ranges from 60% to 85% LTV.
Pepper Money expanded criteria to accept income from UK visa holders on residential mortgages up to 75% LTV.
Skipton Building Society reduced rates across 114 fixed-rate residential mortgage products by up to 0.27%, including options up to 95% LTV for both new and existing customers.
Halifax Intermediaries reduced selected fixed rates by up to 0.10% for homebuyers and up to 0.15% for remortgages.
Accord Mortgages reduced residential fixed rates by up to 0.06% across its full range up to 90% LTV.
Leeds Building Society reduced rates by up to 0.40% across residential, FTB, shared ownership, buy-to-let, portfolio BTL, and interest-only mortgage ranges.
Clydesdale Bank updated self-employed mortgage criteria, including using post-tax profit for limited company directors, increasing the LTI cap to 5 times income, reducing the minimum trading period to two years, and extending the accounts timeframe to 21 months.
Metro Bank launched new HMO and MUFB buy-to-let products up to 75% LTV, available to individuals and limited companies, including support for less-than-perfect credit, student lets, and tenants on benefits.
BM Solutions reduced buy-to-let mortgage rates by up to 0.30% across 2- and 5-year fixed purchase and remortgage products, including green options up to 80% LTV.
Coventry for intermediaries reduced all limited company buy-to-let mortgage rates by up to 0.19%, with updated 2- and 5-year fixed options available up to 75% LTV.
West Brom Building Society reduced 2- and 3-year fixed mortgage rates by up to 0.33%, with new and revised products available up to 95% LTV for both purchase and remortgage.

House Prices Hold Steady in June Amid Annual Growth

UK house prices remained flat in June, with the average property price unchanged at £296,665, according to Halifax House Price Index – June 2025. This stability followed a 0.3% decline in May, but year-on-year values still rose by 2.5%. Analysts attributed the steady market to improved affordability, rising wages, stable interest rates, and more flexible lending conditions introduced in response to regulatory changes.

PRA Adjusts LTI Flow Limit to Boost Lending Flexibility

The Prudential Regulation Authority (PRA) introduced a temporary modification allowing lenders to bypass the 15% cap on high loan-to-income (LTI) residential mortgages, provided overall market-wide limits remain unchanged. This change, valid until June 2026, enables firms to lend more to borrowers with LTIs of 4.5 or above if they opt in and report their activity to the PRA monthly. The adjustment is intended to support first-time buyers and increase homeownership opportunities without raising systemic financial risks.

UK Economy Contracts by 0.1% in May Amid Ongoing Weakness

UK GDP fell by 0.1% in May, following a sharper 0.3% decline in April, marking two consecutive months of contraction. While the services sector showed marginal growth, it failed to offset declines in construction and manufacturing output. The figures, which defied expectations of slight growth, heightened concerns over the UK’s economic outlook and increased pressure on the Government. GDP monthly estimate, UK: May 2025

Construction Output Falls 0.6% in May After Three-Month Growth Streak

Construction output in Great Britain declined by 0.6% in May 2025, ending a three-month period of growth, according to the ONS. The fall was primarily driven by a 2.1% drop in repair and maintenance work, while new construction activity rose slightly by 0.6%. Despite May’s dip, total construction output grew 1.2% in the three months to May, reflecting stronger performance earlier in the quarter. Construction output in Great Britain: May 2025

Swap Rates Show Modest Gains Over the Week, Still Down Annually

Swap rates saw modest increases over the past week, with the 2-year swap rising to 3.607%, up 0.024% from 3.583% the previous week. The 5-year swap rate climbed more sharply, increasing by 0.051% to 3.673%, compared to 3.622% a week earlier. Despite these weekly gains, both rates remain lower than a month ago and have dropped significantly since the same period last year.

Swap Rate	10-Jul-25	11-Jun-25	11-Jul-24
2 Year	3.607%	3.693%	4.336%
5 Year	3.673%	3.720%	3.822%

Updated 11^th July 2025

Mortgage News – 7th July 2025

The mortgage and housing market saw mixed trends, with house price growth continuing to slow as more stock enters the market. Mortgage borrowing rose sharply in May, reflecting renewed buyer confidence, while remortgage activity fell to its lowest level of the year. Meanwhile, the government announced a major investment in affordable housing, and swap rates remained broadly stable with only slight weekly movements.

Mortgage Rate & Criteria Changes

Barclays reduced mortgage rates across residential and remortgage products.
Santander cut rates by up to 0.16% across selected mortgage products.
Nationwide reduced fixed mortgage rates by 0.20%.
Virgin Money made mortgage rate reductions across key product ranges.
The Mortgage Works reduced rates by up to 0.35%.
Precise reduced rates across 2- and 3-year fixed products in its residential range.
Pepper Money launched a limited edition Summer Special mortgage product.
Paragon Bank launched limited edition 2-year fixed rate buy-to-let products.
Foundation Home Loans added new BTL product options and reduced rates.
Vida Homeloans improved affordability and launched limited edition BTL products.

Greater choice for buyers slows house price growth to 1.4% – Zoopla

Annual house price growth slowed to 1.4% across the UK, according to Zoopla, as increased property listings gave buyers more choice and negotiating power. The number of homes for sale rose by 20% compared to this time last year, particularly in southern England where affordability remains stretched. Despite demand remaining steady, sellers are having to be more realistic with pricing due to the greater availability of stock.

Mortgage borrowing rises by £2.8bn in May amid growing approval numbers – BoE

Net mortgage borrowing increased by £2.8bn in May, the highest figure since early 2023, driven by growing consumer confidence. The number of mortgage approvals rose to 60,000, marking the strongest month since September 2022. This uptick reflects improving market sentiment and potentially stabilising interest rate expectations. Money and Credit – May 2025

Annual house price growth slows to 2.1% in June – Nationwide

Nationwide reported that annual house price growth dropped to 2.1% in June, down from 2.5% in May. The slowdown was attributed to affordability pressures and limited momentum in the housing market. Prices remained flat month-on-month, signalling a cautious buyer environment amid economic uncertainty. Nationwide: Annual house price growth softens in June

The government announced a £39bn plan to deliver 300,000 social and affordable homes across the UK. This initiative will span multiple years and include partnerships with housing associations and local councils. It is intended to address the long-standing shortfall in affordable housing provision nationwide.

Second steppers pull back as remortgage activity sees steepest drop of 2025 – Twenty7Tec

Remortgage activity saw its sharpest decline of the year, according to Twenty7Tec, as second steppers scaled back plans. Demand in the purchase market remained stable, but refinancing volumes were down significantly in June. This shift suggests more borrowers are waiting for further rate improvements before committing to new deals.

Swap Rate Movement

Swap rates showed slight fluctuations over the past week, with the 2-year rate edging down to 3.583%, a minor decrease of 0.003% from last week’s 3.586%. This marks a 0.187% fall over the past month and a notable 0.870% drop from the same time last year. The 5-year swap rate saw a marginal weekly increase to 3.622%, up by 0.007%, though it remains 0.159% lower than last month and 0.330% down year-on-year.