Mortgage Market News 2025

Mortgage News – 31st March 2025

Last week brought a notable shift across the mortgage and property market, with lenders actively adjusting rates and criteria to remain competitive. The Spring Statement sparked mixed reactions, as fiscal targets were maintained, but support for the mortgage sector was notably absent. Meanwhile, changes to Stamp Duty, rising supply, and shifting affordability continued to influence buyer behaviour and pricing trends across the UK housing market.

Mortgage Rate & Criteria Changes

• TSB reduced selected 2- and 5-year fixed buy-to-let rates by up to 0.20%.
• HSBC introduced new Premier-only 2- and 5-year fixed BTL products at 60–80% LTV and reduced cashback on Residential Energy Efficient Homes products.
• Santander reduced rates by up to 0.16% across selected 2- and 5-year fixed residential and buy-to-let mortgage products.
• Virgin Money reduced rates across selected residential and buy-to-let fixed mortgage products by up to 0.16%.
• Accord Mortgages launched a new cashback mortgage offering £500 to help first-time buyers offset increased Stamp Duty costs.
• Clydesdale Bank reduced residential purchase and professional mortgage rates, with cuts of 0.05% on 2-year exclusives, 0.37% on 65–80% LTV professional products, and up to 0.03% on 90% LTV newly qualified professional rates.
• Marsden Building Society reintroduced a 95% LTV residential mortgage with a 4.99% fixed rate until April 2030, featuring no fees, no credit scoring, and free valuations up to £500,000.
• Saffron for Intermediaries reduced residential mortgage rates by 0.20%, with two-year fixes now starting from 5.17% and five-year fixes from 4.77% at 80% LTV.
• Vida Homeloans cut residential rates by up to 0.30% and BTL rates by up to 0.54%, while launching a new Fee Saver range and lowering minimum loan sizes on BTL limited editions to £150,000.
• The Mortgage Lender (TML) reduced rates across its buy-to-let and residential mortgage product ranges by up to 0.20%.
• Landbay a buy to let lender reduced rates by 0.10% on limited edition small HMO and MUFB products, and on its new product transfer range, with 5-year fixes now starting at 4.99% up to 75% LTV.
• United Trust Bank reduced buy-to-let rates by up to 1.76%, with 5-year fixed rates now starting at 4.99% for ASTs and 5.29% for HMOs and MUBs.

Spring Statement 2025: Fiscal Rule Met but Economic Concerns and Housing Silence Raise Questions

Chancellor Rachel Reeves reaffirmed the government’s commitment to meeting its fiscal rule despite a short-term rise in the deficit, which the Office for Budget Responsibility (OBR) now forecasts at £40.4bn for 2024-25. Inflation is projected to return to the 2% target by 2027, and GDP is expected to grow just 0.6% annually over the next decade, with growth reliant on planning reforms and investment in infrastructure. While Reeves reiterated housing delivery targets of 1.5 million new homes by the end of the Parliament, no new support for the mortgage market was announced, leaving the sector calling for more collaboration and long-term policy stability.

Santander Loosened Affordability Rules, Increasing Borrowing Potential by Up to £35,000

Santander became the first major lender to ease its affordability criteria, enabling eligible borrowers to access up to £35,000 more, subject to income. This change followed guidance from the FCA aimed at boosting homeownership and encouraging lenders to support growth. The move sparked widespread industry commentary, with most viewing it as a measured and welcome shift towards flexibility, while cautioning against a return to pre-crisis lending behaviour.

Residential Transactions Jumped 28% in February as Buyers Rushed Ahead of Stamp Duty Changes

UK residential property transactions rose sharply in February 2025, driven by buyers rushing to complete before the April Stamp Duty Land Tax changes. Seasonally adjusted residential transactions hit 108,250, marking a 28% increase compared to February 2024 and 13% higher than January 2025. Non-residential transactions also showed modest gains, with seasonally adjusted figures rising 8% month-on-month and 1% year-on-year. UK monthly property transactions commentary – 28 March 2025

37% of First-Time Buyers Now Liable for Stamp Duty as Threshold Support Ends

New analysis has revealed that 37% of first-time buyers (FTBs) are now paying Stamp Duty, following the end of temporary relief measures. This marks a sharp increase from previous years and reflects rising property prices and the lack of updated thresholds. The shift has raised affordability concerns, with industry voices calling for renewed government support to prevent further barriers to entry onto the housing ladder.

UK House Prices Rose 4.9% Annually in January as Stamp Duty Deadline Approached

Average UK house prices increased by 4.9% in the 12 months to January 2025, rising to £269,000, slightly up from 4.6% in December. England saw prices grow to £291,000 (4.8%), with Wales and Scotland also seeing annual increases of 6.0% and 4.6% respectively. Meanwhile, UK private rents remained elevated, rising 8.1% in the 12 months to February 2025, though this marked a slight decrease from January’s 8.7%. Private rent and house prices, UK: March 2025

House Price Growth Slowed to 1.8% in February Amid Rising Supply and Stamp Duty Changes

House price growth eased to 1.8% in February 2025, down from 1.9% in January, as an 11% rise in homes for sale outpaced a 5% increase in sales agreed, according to Zoopla. Regional differences persisted, with stronger growth in the North West and Scotland, while prices in southern England and London remained flat or declined. Increased listings were also influenced by looming changes to council tax on second homes and the impact of higher Stamp Duty costs, affecting buyer affordability, particularly in London. Zoopla House Price Index: March 2025

Inflation Fell to 2.8% in February, Offering Glimmer of Hope for Borrowers

UK inflation eased to 2.8% in the 12 months to February 2025, down from 3.0% in January, according to official CPI figures. While this dip sparked cautious optimism among borrowers and investors, many experts warned that further economic pressures could see inflation rise again. Though it edges inflation closer to the Bank of England’s 2% target, most believe any impact on interest or mortgage rates will be limited in the short term. Consumer price inflation, UK: February 2025

Swap Rates Edge Higher in March as 5-Year Rises 0.057% on the Week

Swap rates continued their upward trend in late March, with the 5-year swap rate increasing to 4.032%, a 0.057% rise from last week’s 3.975%. The 2-year swap rate saw a slight weekly decrease of 0.008%, now sitting at 4.041%. Compared to last month, both the 2-year and 5-year swaps are higher, with the 5-year rate notably up by 0.175%, while on a yearly basis, the 2-year remains 0.310% lower and the 5-year is 0.266% higher.

Swap Rate	27-Mar-25	28-Feb-25	28-Mar-24
2 Year	4.041%	3.972%	4.351%
5 Year	4.032%	3.857%	3.766%

Mortgage News – 17th March 2025

Last week’s mortgage market saw lenders rolling out support measures ahead of the upcoming Stamp Duty deadline, with Accord and Skipton pledging to complete key cases in time. Gen H launched its New Build Boost scheme to assist buyers with low deposits, while Nationwide expanded its lending criteria for interest only and foreign national applicants. ONS data revealed a sharp decline in first-time buyer activity across London over the past decade, highlighting shifting affordability trends across the UK.

Mortgage Rate Changes

• Halifax reduced selected 2-year and 3-year fixed rates by up to 0.15% and increased selected 5-year fixed rates by up to 0.11%.
• Nationwide reduced selected 2-year, 3-year, and 5-year fixed mortgage rates for products between 80% and 95% LTV, with key reductions including rates at 4.99% for 90% and 95% LTV.
• Virgin Money reduced selected 80% LTV purchase fixed rates by up to 0.13% and cut 60% LTV buy-to-let 2-year fixed rates by 0.10%.
• Clydesdale Bank reduced rates by up to 0.36% across its exclusive and professional mortgage ranges, including purchase exclusives, large loan products, and newly qualified professional deals.
• BM Solutions cut selected buy-to-let rates by up to 0.33% and raised selected 5-year fixed remortgage rates by up to 0.31%.
• Accord Mortgages reduced buy-to-let mortgage rates by up to 0.15% across 2-year, 3-year, 5-year fixed, and 2-year tracker products.

Gen H launched New Build Boost scheme targeting low-deposit buyers

Gen H introduced its New Build Boost mortgage scheme, aiming to support buyers with small deposits and no access to family assistance. The scheme offers a structure similar to Help to Buy, combining a 5% buyer deposit, an 80% LTV mortgage, and a 15% interest-free equity boost provided by the house builder. This equity loan, which adjusts with the property’s value, remains interest-free throughout the mortgage term, avoiding the payment shocks associated with Help to Buy.

Nationwide raised LTV limits for interest only and foreign national borrowers

Nationwide increased the maximum loan-to-value for new interest only mortgages from 60% to 75%, allowing more flexibility for borrowers seeking this type of product. For foreign nationals without indefinite leave to remain, the LTV cap rose from 75% to 85%, with revised income requirements and the removal of deposit source restrictions. These changes aim to broaden access and support a wider range of borrowers.

First-time buyer mortgage sales declined sharply across London over the last decade

ONS analysis revealed a significant decline in first-time buyer (FTB) mortgage sales across London between 2013 and 2023, with several boroughs showing some of the UK’s steepest drops. Rising house prices, tougher affordability criteria, and the end of schemes like Help to Buy contributed to the capital becoming increasingly inaccessible for new buyers. While London saw a fall in FTB activity, regions like the South East, North East, and Northern Ireland recorded either steady or increasing levels, highlighting a shift to more affordable areas. First-time buyer mortgage sales fell across London in decade to 2023

Bank of England held base rate at 4.5% in widely expected decision

The Bank of England voted 8–1 to keep the base rate unchanged at 4.5% (Bank Rate maintained at 4.5% – March 2025), resisting market hopes for a cut amid persistent inflation and economic uncertainty. The sole vote in favour of a 0.25% reduction came from Swati Dhingra, highlighting growing concern over the fragile state of the UK economy. Although expected, the decision disappointed many mortgage holders hoping for relief, with attention now turning to May’s meeting for potential rate cuts.

Accord and Skipton act to support buyers ahead of Stamp Duty deadline

Accord Mortgages committed to completing all mortgage cases submitted by 25th March, aiming to protect borrowers from the Stamp Duty increase due on 1st April 2025. In parallel, Skipton Building Society announced the launch of a new 5-year fixed mortgage range on 24th March offering up to 1.50% cashback for those missing the deadline, alongside a guarantee to complete cases where conveyancers submit certificates of title by 25th March. Both lenders are maximising resources to support first-time buyers during what is expected to be an intense completion period before the tax hike.

Mortgage searches rose 8.46% on Bank of England decision days, says Twenty7tec

Analysis from Twenty7tec showed that Bank of England interest rate decisions significantly influence mortgage market activity, with search volumes rising notably on decision days. Average Thursday mortgage searches increased by 3.28% on decision days compared to normal Thursdays, and by 8.46% compared to the Thursday following the announcement. The surrounding weeks also saw fluctuations, with searches peaking the Monday after decision day, up 18.31% from a typical Monday.

Larger homes drove UK property price growth in early 2025, says Halifax

UK property prices rose by 3.7% in January 2025, driven largely by demand for larger homes such as terraced and detached houses, according to Halifax. Terraced properties saw the highest annual growth at 4.5%, while detached homes followed at 4.1%; flats lagged behind with a 3.2% increase, despite a brief surge last October. New build flats bucked the trend with stronger 6.7% growth, and significant regional variation was seen, with Northern Ireland and the North East showing the strongest performance in larger property types. Demand for bigger homes driving house price growth – Halifax.

Home insurance premiums increased 8.5% due to rebuilding cost pressures

Go.Compare data revealed that average home insurance premiums rose by 8.5% over the past year, with combined policy costs increasing from £213 to £231 between October and December 2024. Rising inflation, material shortages, and higher labour and rebuilding costs were cited as key drivers behind the increase. Regional disparities remain significant, with Northern Ireland and Greater London facing the highest premiums, while smaller properties continue to see lower average costs.

UK buy-to-let company numbers surpass 400,000 as tax changes reshape landlord market

The number of UK buy-to-let companies surged to 401,744 by February 2025 according to Hamptons February 2025 lettings index, a 332% increase since 2016, driven by tax changes affecting higher-rate taxpayers. In 2024 alone, over 61,000 new companies were set up, indicating a continued shift towards corporate ownership structures in the rental sector. Despite this growth, rental price increases have slowed, with national rent growth at just 1.0% and London rents declining, particularly in Inner London where they fell by 5.1%.

Swap rate movement shows slight upward trend with mixed annual shifts

Swap rates edged higher over the past week, with the 2-year swap rate rising by 0.040% to reach 4.049%, up from 4.009% last week. The 5-year swap rate also saw a modest increase of 0.011%, moving from 3.964% to 3.975%. While both short- and medium-term rates have seen marginal monthly gains, the 2-year rate remains 0.305% lower than this time last year, in contrast to the 5-year rate, which has risen by 0.164% over the same period.

Swap Rate	20-Mar-25	21-Feb-25	21-Mar-24
2 Year	4.049%	4.041%	4.354%
5 Year	3.975%	3.950%	3.811%

Mortgage News – 17th March 2025

The mortgage market saw HSBC increasing buy-to-let LTVs to 80% and lenders such as Leeds Building Society, The Mortgage Works, and Aldermore reducing rates to support borrowers. Meanwhile, economic uncertainty persisted as inflation expectations rose despite official rates declining, and the UK economy contracted by 0.1% in January, increasing pressure on the Bank of England to consider rate cuts. First-time buyer activity surged, mortgage product availability hit a record high, and remortgage instructions climbed, reflecting a dynamic yet challenging housing market.

Mortgage Rate Changes

• HSBC increased its buy-to-let loan-to-value (LTV) to 80%, with restrictions including a £400,000 loan cap and an EPC requirement of A-C.
• Leeds Building Society reduced mortgage rates by up to 0.3%
• Gen H made both increases and reductions to its rates.
• The Mortgage Works reduced rates by up to 0.30% across selected buy-to-let products for new customers.
• Aldermore reduced mortgage rates by up to 0.70% across higher loan-to-value (LTV) products, benefiting first-time buyers and those with lower deposits.

Public Inflation Perceptions Remained Elevated Despite Falling Official Rates

The Bank of England’s latest Inflation Attitudes Survey (Bank of England/Ipsos Inflation Attitudes Survey – February 2025) revealed that the public perceived inflation at 4.9%, slightly higher than the 4.8% reported in November 2024. Inflation expectations for the coming year also increased to 3.4%, up from 3% previously. Additionally, 34% of respondents expected interest rates to rise over the next year, compared to 33% in November, while 71% believed the economy would weaken if prices rose faster, up from 66% in the previous survey.

UK Economy Contracted by 0.1% in January, Increasing Pressure on the Bank of England

The UK economy shrank by 0.1% in January 2025, following a 0.4% expansion in December, driven by a sharp 0.9% decline in production output and continued struggles in the manufacturing and construction sectors. The services sector managed to grow by 0.1%, helping to support a 0.2% rise in GDP over the three months to January. Despite signs of economic fragility, experts believed the Bank of England would maintain its cautious stance on interest rates, though expectations for a summer rate cut were growing. If markets begin pricing in earlier rate cuts, swap rates could decline, potentially leading to lower mortgage rates in the coming weeks. GDP monthly estimate, UK: January 2025

Rising Overdraft Usage Signals Financial Strain on UK Businesses

The latest UK Finance Business Finance Report (Business Finance Review Q4 2024) revealed a sharp increase in demand for overdrafts and loan finance in Q4 2024, particularly among the smallest SMEs. This surge suggested that many businesses were relying on short-term credit to manage cash flow rather than investing in growth. With economic uncertainty mounting and borrowing costs still elevated, concerns were growing that April’s fiscal changes could further squeeze struggling businesses.

Tax Return Threshold Raised, Easing Burden for 300,000 Side Hustlers

The government announced plans to increase the Income Tax Self-Assessment reporting threshold for trading income from £1,000 to £3,000, freeing up 300,000 taxpayers from filing tax returns. This change will particularly benefit individuals with side hustles such as online selling, dog-walking, and taxi driving, with an estimated 90,000 no longer having any tax to pay or report. The move aimed to simplify tax administration, reduce bureaucracy, and support economic growth by allowing small-scale entrepreneurs to focus on earning rather than compliance. Boost for side-hustlers as 300,000 people to be taken out of tax returns, government announces

Government Announced Planning Reforms to Accelerate Housebuilding

The government unveiled new planning reforms aimed at speeding up the construction of homes and key infrastructure, promising the biggest building boom in a generation. The reforms sought to tackle bureaucratic delays, streamline approvals, and unlock billions in economic growth. However, concerns remained over the potential impact on housing quality, environmental protections, and whether the reforms would translate into real delivery amid labour shortages and funding challenges. ‘Biggest building boom’ in a generation through planning reforms

FCA Report Showed Decline in Early Mortgage Deal Lock-Ins

The FCA’s latest Mortgage Charter data (Mortgage Charter uptake data – March 2025) revealed that between November 2024 and January 2025, around 280,000 mortgages were locked into a new deal up to six months ahead of maturity, a drop from 377,000 in the previous period. Additionally, the number of borrowers switching to an alternative deal after initially locking in fell significantly from 102,000 to 27,000, reflecting fewer options amid rising interest rates. Meanwhile, approximately 164,000 mortgages had temporarily reduced monthly payments under the new FCA rules, highlighting continued financial strain among borrowers.

First-Time Buyers Drive Mortgage Lending to Record Highs

The Bank of England’s latest report (Mortgage Lenders and Administrators Statistics – 2024 Q4) showed that first-time buyers accounted for 29.6% of mortgage lending in Q4 2024, the highest share since records began. The total value of outstanding residential mortgage loans hit £1,678.2 billion, while new mortgage commitments rose by over 50% from a year earlier. However, affordability concerns persisted, with 45.8% of lending classed as high loan-to-income, and mortgage arrears increasing by 8.4% year-on-year to £22.1 billion, reflecting financial pressures on borrowers.

Stamp Duty Deadline Drove Surge in Housing Market Activity

Propertymark’s Housing Insight Report: January 2025 revealed a 20% increase in property sales in January 2025 compared to the previous year, as buyers rushed to complete purchases before the upcoming Stamp Duty threshold changes in April. The average house price stood at £268,000, over seven times the average annual gross earnings, highlighting affordability challenges. Meanwhile, tenant demand in the rental market surged, with registrations jumping from 79 in December to 115 in January, further intensifying supply shortages.

Mortgage Market Surpassed 25,000 Products in February

The mortgage market reached a new milestone in February 2025, surpassing 25,000 available products for the first time, according to Twenty7tec the mortgage sourcing software provider. The total number of products increased by 2.33% from January, with more than 1,806 options available in the 90% and 95% LTV ranges. February also saw a record average of 24,776 products available daily, marking a 27.1% increase from February 2024, driven in part by increased first-time buyer activity.

Mortgage Shelf-Life Fell to 16 Days Amid Rate Reductions

The average mortgage shelf-life dropped to just 16 days in March, down from 36 days in February, as lenders reacted to falling rates, according to Moneyfacts. The average 2-year and 5-year fixed mortgage rates saw their biggest monthly drops in nearly six months, decreasing by 0.13% and 0.10% to 5.39% and 5.22%, respectively. Meanwhile, the total number of mortgage products rose to 6,684, the highest since February 2008, with borrowers benefiting from increased competition and swap rate volatility.

Remortgage Activity Increased by 12% in February

LMS who manages a leading UK solicitor panel, offering conveyancing solutions via approved law firms and conveyancers reported a 12% rise in remortgage instructions in February 2025, alongside an 11% increase in completions and an 8% drop in cancellations. Borrowers who remortgaged faced an average monthly payment increase of £294.66, with 42% opting to increase their loan size. Five-year fixed-rate products remained the most popular choice, selected by 46% of borrowers. Despite an overall 2% decrease in average remortgage amounts, regional variations saw increases in Northern Ireland and the East Midlands.

One-Third of Homebuyers Unclear on Mortgage in Principle

A survey by Barratt Homes found that 33% of prospective homebuyers did not fully understand what a mortgage in principle entails, despite its importance in securing a property. While two-thirds of buyers recognised its value in making them more appealing to sellers, many were unclear about the process, with common mistakes including failing to check credit reports and applying for multiple agreements without advice. It is emphasised that securing a mortgage in principle helps buyers set a realistic budget, improves credibility with sellers, and speeds up the home-buying process.

First-Time Buyer Mortgage Payments 20% Cheaper Than Renting

Zoopla reported that first-time buyer (FTB) mortgage payments, averaging £1,038 per month, are 20% lower than the average UK rent of £1,248. Buying is more affordable than renting in most regions, with the North East showing the widest gap, while in areas like Harrogate and Watford, renting remains cheaper. However, mortgage regulations continue to make it difficult for middle-income renters to transition to home ownership, despite their ability to afford high rental payments. Buying beats renting: First-time buyer mortgage repayments 20 per cent lower than rent across Great Britain

Swap Rates Showed a Slight Decline Over the Past Week

Swap rates saw a minor decrease over the past week, with the 2-year swap rate falling to 4.009%, a 0.029% drop from last week’s 4.038%. Despite this weekly decline, the 2-year rate remains 0.008% higher than last month but 0.479% lower than the same period last year, continuing its long-term downward trend. Meanwhile, the 5-year swap rate dipped slightly to 3.964%, down 0.005% from last week’s 3.969%, though it remains 0.061% higher than last month and 0.049% above the rate from a year ago, indicating relative stability in longer-term expectations.

Swap Rate	13-Mar-25	14-Feb-25	14-Mar-24
2 Year	4.009%	4.001%	4.488%
5 Year	3.964%	3.903%	3.915%

Mortgage News – 10th March 2025

The mortgage market saw a range of rate reductions from major lenders, with Barclays, Halifax, Leeds Building Society, and Virgin Money among those making notable cuts. Market activity remained steady despite economic shifts, with the FCA exploring ways to improve mortgage accessibility and Coventry and Nottingham Building Societies reporting strong financial results. Meanwhile, house prices held firm, first-time buyer affordability remained a challenge, and swap rates showed slight upward movement, reflecting ongoing adjustments in the lending landscape.

Mortgage Rate Changes

• Barclays reduced mortgage rates, including its Green Home five-year fixed rate to 3.96%, lowered other rates by up to 0.48%, and increased loan caps for 90% LTV purchases.
• Halifax initially reduced homebuyer and first-time buyer mortgage rates by up to 0.14%, with the largest cuts on high-LTV two-year fixed products. They have then gone further later in the week and reduced rates on selected fixed-rate remortgage products by up to a further 0.25% and on product transfer and further advance products by up to 0.31%.
• Leeds Building Society reduced mortgage rates by up to 0.30% and introduced a new first-time buyer mortgage with £1,000 cashback.
• Kent Reliance reduced rates on selected 2-year and 5-year fixed buy-to-let products, with cuts of up to 0.40% on product transfers.
• Virgin Money reduced mortgage rates across selected purchase, remortgage, and buy-to-let products by up to 0.68%.
• Gen H reduced mortgage rates by up to 0.30% across its standard, homebuying, and retention ranges.
• TSB reduced mortgage rates across selected residential, product transfer, and additional borrowing products by up to 0.20%.
• Clydesdale Bank reduced mortgage rates across selected residential and buy-to-let products by up to 0.21%.
• The Mortgage Lender expanded its buy-to-let range with a new 80% LTV product, increased the first-time landlord loan limit to £500,000, and reduced selected BTL and residential rates by up to 0.10%.

FCA Outlines Steps to Improve Mortgage Access

The Financial Conduct Authority (FCA) detailed measures to make mortgages more accessible by encouraging lenders to use the flexibility within existing rules. With interest rates falling, the FCA believes current stress testing methods may be overly restrictive, preventing creditworthy borrowers from securing affordable mortgages. The regulator will launch a call for evidence on alternative stress testing approaches, followed by consultations in May and June to simplify mortgage rules and assess the market’s future.

Average House Prices Remain Stable in February – Halifax HPI

Halifax’s latest House Price Index February 2025 showed that UK house prices held steady in February, dipping slightly by 0.1% after a 0.6% increase in January. The annual growth rate remained at 2.9%, with regional variations, including stronger growth in Scotland (3.8%) and Northern Ireland (5.9%). London saw a slowdown, with annual price growth easing from 2.6% to 1.6%, though it continued to have the highest average property price at £545,183.

Coventry Building Society Reports Strong 2024 Financial Results

Coventry Building Society posted strong financial results for 2024, following its acquisition of The Co-operative Bank. The society reported a statutory profit before tax of £323m, in line with expectations, despite a decline in net interest margin to 1.07%. Key highlights included low mortgage arrears at 0.33%, a strong capital position with a leverage ratio of 5.7%, and increased investment in technology, customer service, and community initiatives.

Nottingham Building Society Reports Record Mortgage Assets and Strong 2024 Results

Nottingham Building Society achieved record mortgage assets of £4.2bn in 2024, with total assets reaching £5.2bn. Gross new mortgage lending rose by 37% to £1,215m, while the number of new mortgage customers increased by 32%. Savings balances also saw a 22% rise to £4.4bn, with total interest paid to savers reaching £154.6m, reflecting the society’s commitment to supporting both borrowers and savers.

Mortgage Searches Decline in February as Market Slows – Twenty7tec

Twenty7tec reported a decline in mortgage searches in February 2025, with remortgage activity seeing the sharpest drop. Compared to January, purchase mortgage searches fell by 0.05%, while remortgage searches dropped by 5.39%. Buy-to-let purchase and remortgage searches also declined by 1.85% and 6.13%, respectively. Year-on-year, remortgage searches were down by 29.90%, and buy-to-let purchase searches fell by 14.23%. Despite the slowdown, affordability criteria use surged by 39.9% month-on-month and 78.5% compared to February 2024, indicating a shift in borrower focus.

First-Time Buyer Mortgage Payments Remain Over £350 Higher Than Five Years Ago

Rightmove’s latest data revealed that the average first-time buyer (FTB) monthly mortgage payment increased from £578 in 2019 to £931 in 2025, marking a rise of £353. Although this remains £150 lower than the 2023 peak, affordability pressures persist, with mortgage rates significantly higher than five years ago. Regional disparities highlight varying affordability challenges, with London FTB properties now nearly five times the average combined salary, while mortgage payments in the North West and Yorkshire & The Humber have risen by 75% and 74%, respectively. First-time buyer mortgage payments still over £350 more than five years ago

Challenger Banks Achieve Record Lending Share in 2024

The British Business Bank’s Small Business Finance Markets Report 2025 revealed that challenger and specialist banks provided 60% of the £62.1bn lent to smaller businesses in 2024, marking a record high. However, the number of small businesses accessing finance dropped to 43% due to high credit costs and economic uncertainty, leading many to prioritise slower growth over borrowing. The report also highlighted challenges faced by ethnic minority-led businesses, particularly Black entrepreneurs, with 59% struggling to secure finance.

March 2025 Property Market Update

The UK property market remained resilient in March despite the impending Stamp Duty changes. Sales agreed were up 15% year-on-year (Rightmove), and Nationwide reported a 14% increase in transactions in the second half of 2024 compared to 2023. However, house prices showed mixed trends, with Halifax reporting a -0.1% dip in February while Nationwide noted a 3.9% annual rise. Mortgage approvals in January stood at 66,189, down 0.5% from December but 18.3% higher than last year. Rightmove data also showed a record number of mortgage applications in principle, reflecting continued buyer demand. Get Agent Property Market Update: March 2025

Rental Demand Falls by 17% as Supply Increases – Zoopla

Zoopla’s Rental Market Report: March 2025 revealed a 17% decline in rental demand over the past year, while supply increased by 11%. The average monthly rent for new lets in the UK reached £1,284 in December 2024, up 3% year-on-year, marking the slowest rate of growth in 3.5 years. Despite easing competition, 12 renters are still chasing each available rental home, down 42% from peak 2022-24 levels but still higher than pre-pandemic figures. Rental affordability remains a key constraint, with annual rental costs increasing by £3,000 to an average of £15,400.

Swap Rates Show Upward Movement Over the Past Week

Swap rates experienced a slight upward shift over the past week, with the 2-year swap rate rising to 4.038%, an increase of 0.059% from last week’s 3.979%. Despite this weekly uptick, the 2-year rate remains 0.451% lower than the same period last year, reflecting the broader downward trend seen over the past 12 months. The 5-year swap rate also climbed to 3.969%, marking a 0.087% increase from last week’s 3.882%, though it remains only 0.092% higher than a year ago, indicating a relatively stable long-term outlook.

Swap Rate	06-Mar-25	07-Feb-25	07-Mar-24
2 Year	4.038%	3.976%	4.489%
5 Year	3.969%	3.847%	3.877%

Mortgage News – 3rd March 2025

The mortgage market saw multiple lenders reducing fixed rates, with cuts of up to 0.60% across residential and buy-to-let products. Meanwhile, property transactions increased by 14% year-on-year in January 2025, and house prices continued their steady growth, with Zoopla forecasting a 2.5% rise by the end of the year. In other financial developments, swap rates declined across multiple terms, Metro Bank shifted focus to specialist lending by selling a £584m loan portfolio, and concerns grew over 74,000 home-movers likely to miss the Stamp Duty deadline, facing an estimated £142m in extra costs.

Mortgage Rate Changes

• Nationwide reduced selected fixed mortgage rates across their range by up to 0.25%.
• TSB reduced selected residential fixed mortgage rates by up to 0.25%.
• MPowered Mortgages reduced 2-year and 3-year fixed residential rates, with 2-year rates now starting at 4.29% and 3-year rates at 4.12%.
• Coventry for Intermediaries reduced selected residential fixed mortgage rates by up to 0.09%.
• Principality Intermediaries reduced selected fixed mortgage rates by up to 0.60%.
• Virgin Money reduced mortgage rates across purchase and product transfer ranges by up to 0.11%, also selected buy-to-let fixed mortgage rates by up to 0.10%.
• Fleet Mortgages, buy to let lender reduced selected 2-year fixed rates by up to 0.50%.
• The Mortgage Works (TMW), buy to let lender reduced selected buy-to-let fixed rates by up to 0.35%.

UK Property Transactions Increased in January 2025

HMRC reported UK monthly property transactions commentary – February 2025 that UK residential property transactions in January 2025 reached 95,110 on a seasonally adjusted basis, marking a 14% rise compared to January 2024 but showing little change from December 2024. The non-seasonally adjusted figure stood at 81,360, reflecting a 21% year-on-year increase but a 17% drop from December 2024. Meanwhile, non-residential transactions declined, with seasonally adjusted figures showing a 5% decrease from January 2024 and a 4% drop from December 2024.

House Price Growth Remained Steady in February

Nationwide reported that UK house prices grew by 3.9% annually in February 2025, slightly down from 4.1% in January. Month-on-month, prices increased by 0.4%, reflecting continued resilience in the housing market despite economic challenges. Market analysts noted that factors such as pent-up demand, competitive mortgage rates, and a lack of housing supply are supporting price stability, with expectations of further growth as the year progresses. House price growth remains solid in February

House Prices Forecast to Rise by 2.5% in 2025

Zoopla’s latest House Price Index projected that UK house prices would increase by 2.5% by the end of 2025, with the average house price in January standing at £267,200. Market activity remained strong, with sales agreed up 10% and available homes for sale rising 11% compared to last year. However, annual house price inflation edged down to 1.9% in January, with growth varying regionally — Northern Ireland saw a 7.2% rise, while London and the South experienced only a 1% to 1.2% increase. House Price Index: February 2025

Later Life Lending Grew Significantly in Q4 2024

UK Finance reported Later Life Mortgage Lending – Q4 2024 that 35,840 new loans were advanced to older borrowers in Q4 2024, marking a 28.2% increase compared to the same period in 2023. The total value of this lending reached £5.6bn, up 38.6% year-on-year. Lifetime mortgage lending also grew, with 5,700 new loans issued, a 6.7% rise, while retirement interest-only mortgages saw a 35.6% increase in volume.

Dr. Swati Dhingra Reappointed to the MPC

The Chancellor of the Exchequer, Rachel Reeves, confirmed the reappointment of Dr. Swati Dhingra as an external member of the Monetary Policy Committee (MPC). Dhingra, known for her dovish stance, previously voted for a 0.5% rate cut, signalling her continued push for lower interest rates. Experts noted that while her reappointment strengthens the argument for rate cuts, broader MPC sentiment will ultimately determine future Bank Rate decisions. Dr. Swati Dhingra reappointed to the Monetary Policy Committee

Metro Bank Sells £584m Loan Portfolio to Boost Specialist Lending

Metro Bank has sold a £584m portfolio of personal loans to enhance its focus on specialist lending. The transaction is expected to generate an £11m gain and improve the bank’s balance sheet, increasing its CET1 ratio by approximately 0.81%. The move will free up capacity for lending in key areas such as commercial, corporate, small business, and specialist mortgages.

Over 70,000 Home-Movers Set to Miss Stamp Duty Deadline

Rightmove’s analysis Over 70,000 homemovers set to miss stamp duty deadline revealed that nearly 74,000 home-movers in England are likely to miss the 31st March 2025 Stamp Duty deadline, facing an estimated £142 million in additional tax costs. Among them, 25,000 first-time buyers could collectively pay an extra £34 million, with some facing increases of up to £11,250. The South East is expected to be the most impacted region due to higher property prices, leading to calls for a short extension to the deadline to ease the financial burden.

Swap Rates Declined Across Multiple Terms

Swap rates saw a downward trend over the past week, with the 2-year swap rate falling to 3.979%, a decrease of 0.079% from last week’s 4.058%. This decline extends further over the past month, with the 2-year rate down by 0.134%, and it remains significantly lower than the same time last year, having dropped by 0.582%. Similarly, the 5-year swap rate decreased to 3.882%, marking a 0.101% reduction from last week’s 3.983%. Over the past month, the 5-year rate declined by 0.090% and is now 0.142% lower than a year ago, indicating a continued easing in market rates.

Swap Rate	27-Feb-25	28-Jan-25	28-Feb-24
2 Year	3.979%	4.113%	4.561%
5 Year	3.882%	3.972%	4.024%

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