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Barclays for Intermediaries has made a second round of residential mortgage rate improvements in a week and now offers five-year fixed-rate deals below 4.4%. The 

Banks and building societies are working much harder to get their phones ringing again. They are concentrating on making their property purchase rates cheaper, and the price war is intensifying.

The latest rate reductions came after Barclays cut residential rates by up to 0.57% on Monday.

Barclays says: “The market is moving at a fast pace and we are committed to remaining nimble with our pricing to ensure we continue to provide would-be homebuyers with our most competitive offering."

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The information contained within was correct at the time of publication but is subject to change.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage 

According to official Bank of England data, UK mortgage approvals rose in October—the rise in mortgages points to a stabilisation in the property market after prolonged low house sales.

The Bank of England said net mortgage approvals for house purchases rose to 47,400 in October from 43,700 in September. Net approvals for remortgaging increased from 20,600 in September to 23,700 in October.

Aaron Strutt, product director at Trinity Financial, says: “There seems to be more confidence in the property market now the Bank of England Monetary Policy Committee has held back from raising the base rate.

“Mortgage lenders have been offering cheaper rates, and there is more competition in the market to attract borrowers. Incredibly five-year fixes are roughly 0.75% below the base rate.”

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages saw a 24 basis point increase and now sits at 5.25%.

Net borrowing of consumer credit by individuals amounted to £1.3 billion in October, down from £1.4 billion in the previous month.

Picture source: Bank of England

Call Trinity Financial on 020 7267 9399 to secure a mortgage or book a consultation 

The information contained within was correct at the time of publication but is subject to change

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage  

Banks and building societies are pushing harder to tempt borrowers to take their mortgages, and they are competing to issue the most competitively priced rates.

The cost of funding mortgages has been coming down, meaning the price reductions have filtered through to borrowers. However, many lenders have not lent anywhere near as much money as they would have liked, leading to the recent price war.   

Hundreds of thousands of mortgage holders will need to switch deals over the festive period, and while many of them will face big repayment hikes, they will not be quite as drastic, thanks to the recent price reductions.

After offering high rates for such a long period, there are now two-year fixes starting at 4.7% and five-year fixes starting at 4.4%. It is worth noting the big lenders offer cheaper rates to borrowers purchasing a property rather than remortgaging. 

Here is a summary of the changes many of the biggest lenders have made this week to make improvements, including Barclays, Halifax, Santander, and NatWest:

Halifax for Intermediaries mortgage rate changes

Halifax for Intermediaries has improved the pricing on its homebuyer mortgages, including first-time buyer, new build property, large mortgage loans and affordable housing products.

The rates have been improved by up to 0.72% on selected two-year and five-year fixed-rate mortgage products. The bank also reduces selected residential and buy-to-let fixed rates in the new business and product transfer ranges.

Santander for Intermediaries mortgage rate changes

Santander for Intermediaries has announced that it is making further rate changes to make its mortgages more affordable.

• Selected standard residential fixed rates were reduced by between 0.03% and 0.27%.
• Selected new build property fixed rates reduced by between 0.05% and 0.29%.
• Selected buy-to-let fixed rates reduced between 0.05% and 0.17%.

NatWest for Intermediaries mortgage rate changes

NatWest for Intermediaries has made a wide range of mortgage rate changes and lowered some of its buy-to-let mortgages by over 1%.

• Property purchase: Rate reduction of up to 0.26% and 0.30% on selected two and five-year deals.
• Remortgage: Rate reduction of up to 0.40% and 0.24% on selected two and five-year deals.
• First-time buyer: Rate reduction of up to 0.26% and 0.18% on selected two and five-year deals.
• Buy-to-let property purchase: Rate reduction of up to 0.42% and 0.55% on selected two and five-year deals.
• Buy-to-let remortgage: Rate reduction of up to 0.31% and 0.40% on selected two and five-year deals.

New Business Rate and Fee Changes:

• Buy to Let - purchase: Rate reduction of 1% and 1.06% on selected two-year deals. The product fee increased to £3,499.
• Buy to Let – remortgage: Rate reduction of up to 0.80% and 0.85% on selected two-year deals. The product fee increased to £3,499.

Barclays mortgage rate change announcement:

Following a further review of its mortgage offering against market funding, Barclays has confirmed it has reduced rates on a selection of products across our residential purchase and reward ranges.

These changes will see some of its mortgage available for loans between £2 million and £10 million property purchase and remortgage products reduced by as much as 0.57%. There is also positive news for borrowers with smaller deposits of at least five per cent.

Call Trinity Financial on 020 7267 9399 to secure a mortgage or book a consultation 

The information contained within was correct at the time of publication but is subject to change

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage  

Exploring the role of first-time buyers on the UK economy

First-time buyers (FTB) have had to navigate significant challenges with high inflation and rising interest rates over the last few years. However, an analysis released by Coventry Building Society’s latest First Time Buyer Economy Report shows that total mortgage lending to this particular market segment is projected to grow 16% in 2024, reaching £65.3 billion.

Coventry's research shows that the average age of a FTB has only risen by one year from 33 to 34 since 2022. Average house prices vary widely across the UK, ranging from £193,800 in Yorkshire to £374,100 in Edinburgh in 2023.

Where we’re going: A steady recovery

As we head into 2024, it is anticipated that transactions among FTBs will start to increase as market conditions stabilise and confidence returns to the housing market. As a result, 330,000 FTB transactions are expected in 2024, with Coventry's research predicting average loan sizes set to increase by 3% to £202,500 in 2025. Additionally, the total value of mortgage lending to FTBs is set to amount to £65.3 billion in 2024 and further increase to £71 billion in 2025.

Average FTB house price by region

Average house prices vary considerably across the country, with FTBs in or around Edinburgh reporting the highest average house price at £374,100, while those in Yorkshire paid £193,800, 31% below the UK average.

The unforeseen costs

One of the most overlooked aspects of buying a house is the unforeseen costs, such as legal fees, moving costs, mortgage and valuation fees, and stamp duty. Coventry's research found that although 77% of FTBs were aware of legal fees, only 53% were aware of stamp duty costs, and only 47% were aware of mortgage product fees before they applied for a mortgage.

Funding the deposit

Although mortgage affordability is now the main concern for FTBs looking to get on
the property ladder, according to the Building Societies Association, raising a deposit
remains a significant challenge for many. 

However, it is encouraging to note that despite rising living costs, the length of time taken
to save remains unchanged from 2022 at three to four years.

The value of mortgage broker advice

With the broker's role more important than ever in helping FTBs navigate market complexities and establish future pipeline business, it is encouraging to see that 96% of those who used a broker said they were important in the home buying process, compared to 90% in 2022. However, concerns remain that 44% of FTBs would turn to family and friends before a broker for advice on the home buying process, as family members are unlikely to have the same level of knowledge as a professionally qualified broker.

According to Coventry Building Society - Mortgage brokers have a valuable opportunity to bridge this knowledge and advice gap. As they interact with clients daily, discussing various mortgage needs, brokers can also emphasise their support for first-time buyers to clients who may be parents or guardians of aspiring homeowners. Furthermore, Coventry's report reveals a knowledge gap amongst FTBs, with 40% saying they needed more information and guidance about applying for a mortgage. In comparison, 36% required more detail on the exchange of contracts and associated costs such as legal and broker fees, the deposit and stamp duty.

Coventry Building Society’s latest First Time Buyer Economy Report: Conclusion 

With inflation set to remain high and the cost of living crisis continuing, brokers will continue providing an essential source of knowledge and targeted advice to FTBs during home-buying. Research shows that many FTBs are unaware of the associated costs of buying a house before they start their home-buying journey, which can add up to £8,300.

Here, brokers can differentiate themselves from other information sources by helping FTBs understand how and what they should be budgeting. In addition, many younger FTBs are finding it difficult to secure a mortgage. They rely on financial support from family and friends, so brokers, with access to a broader selection of products across the market and knowledge of lenders’ criteria, will continue to play an integral role in supporting FTBs onto the property ladder.

Source: All information in the article taken from Coventry Building Society’s latest First Time Buyer Economy Report: Conclusion 

Call 020 7267 9399 to secure a first-time buyer mortgage or book a consultation 

The information contained within was correct at the time of publication but is subject to change

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage  

Nationwide for Intermediaries has launched a sub-4.5% five-year fixed mortgage, intensifying the price war.

The 4.43% mortgage is fixed for five years and available to borrowers purchasing a property. Applicants will need a 40% deposit to qualify, and the maximum loan size is £5 million. Nationwide's equivalent remortgage product is 0.25% higher.

After the fixed period, the mortgage reverts to the lender's current 7.99% standard variable rate, and there is a £999 arrangement fee. The overall cost for comparison is 6.8% APRC representative.

Aaron Strutt, product director at Trinity Financial, says: “Nationwide was not the only lender to lower rates this week. Coventry for Intermediaries, TSB, HSBC, and Santander have all reduced rates. Nationwide launched a sub-5% recently, which gives borrowers more options, especially if they want a shorter-term mortgage deal.

“Nationwide has a habit of lowering its mortgage rates after Bank of England base rate increases, and this time the lender launched this rate just after the Autumn Statement, which did not have much in for buyers, homeowners or the property market in general.”

Representative example: A capital and interest mortgage of £500,000 payable over 30 years, initially on a fixed rate basis for five years at 4.43% and then on the bank's standard variable rate currently 7.99% for the remaining 25 years, 4.43% would require 60 monthly repayments of £2,510.53 followed by 300 payments of £3,508.54. The total amount repayable would be £1,204,277.80 made up of the loan amount, plus interest (£705,971.81 and £999 (product fee), £65 (final repayment charge), £25 (completion fee). The overall cost for comparison is 6.8% APRC representative.

Call Trinity Financial on 020 7267 9399 to secure a mortgage or book a consultation

The information contained within was correct at the time of publication but is subject to change

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage

The most competitively priced two-year fixed-rate mortgage has dipped below 5 per cent for the first time since June.

Nationwide for Intermediaries has launched a two-year fix priced at 4.99% and it is available to borrowers purchasing a property. Applicants will need a 40% deposit to qualify and the maximum loan is £1 million. The lender's two-year fixed remortgage rate is 0.25% more expensive. 

The product has a £999 arrangement fee, and after the fixed period, the mortgage reverts the lender's 7.99% standard variable rate. The overall cost for comparison is 7.7% APRC representative.

Nationwide, the UK’s largest building society is now offering sub-5% two, three, five and ten-year fixes for borrowers while its two-year tracker is 0.14% over the Bank of England base rate.

Over the last few months, mortgage rates have got cheaper, although the five-year fixes are generally the most competitively priced rates, with some lenders offering rates just over 4.5%.

Henry Jordan, Director of Home at Nationwide Building Society, said: “We’re making further rate cuts across our fixed rate mortgage range to ensure we continue to cement our position as one of the most competitive lenders in the market.

“Over the last three months, we have reduced rates eight times and, over that period, that has meant our rates have fallen by up to 1.39 percentage points as we look to maintain our support for potential and existing homeowners, as well as brokers, by offering attractively priced products.”

Representative example: A capital and interest mortgage of £400,000 payable over 30 years, initially on a two-year fixed rate basis at 4.99% and then on the lender's 7.99% standard variable rate for the remaining 28 years. The 4.99% rate would require 24 monthly repayments of £2,142.98 followed by 336 payments of £2,891.65. The total amount repayable would be £1,024,109.92 made up of the loan amount, plus interest (£625,495.33) and £999 (product fee), £65 (final repayment charge), £20 (completion fee). The overall cost for comparison is 7.7% APRC representative.

Call Trinity Financial on 020 7267 9399 to secure a mortgage or book a consultation 

The information contained within was correct at the time of publication but is subject to change

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage