Day: May 17, 2025

Santander UK has confirmed mortgage rate reductions of up to 0.19%, introducing further sub-4% loans, to more than 60 products with effect from 20 May. The rate cuts apply to products across its home mover, first time buyer, remortgage and buy-to-let ranges. Rate examples include for home movers – 60% LTV two-year fixed rate, £999 fee, rate reduced by 0.09% to 3.80% and 90% LTV five-year fixed rate, £0 fee and £250 cashback, rate reduced by 0.13% to 4.49%. For first-time buyers –   60% LTV two-year fixed rate with a £0 fee, rate reduced by 0.05% to 4.13%; and 85% LTV two-year fixed rate with a £0 fee and £250 cashback, rate reduced by 0.11% to 4.47% – currently top of market1 For remortgage –  60% LTV two-year fixed rate with a £0 fee, rate reduced by 0.19% to 4.13%;  and 75% LTV five-year fixed rate with a £999 fee, rate reduced by 0.09% to 3.98% These cuts follow reduction announced earlier today by Virgin and TSB. The post Santander to offer more sub-4% loans among 60 rate cuts appeared first on Mortgage Strategy.

The UK Government will launch a consultation later this year in a major reform to property ownership, with a plan to ban new leasehold flats. This will mark one of the most significant changes in the property industry in decades. While commonhold ownership is far less established, with only 184 properties registered in England and Wales, compared with nearly 4.77 million leasehold homes in England alone, the market is set to take a new direction in how flats will be owned and managed. For buy to let (BTL) landlords, the shift to commonhold brings both challenges and opportunities, impacting everything from ownership rights to service charge structures, requiring landlords to reassess how they manage and invest in properties. As the market adapts, mortgage brokers will play a key role in helping landlords navigate the legal and financial implications to future-proof their property portfolios. The end of leasehold As part of the Leasehold and Commonhold Reform Bill, the government is planning to launch a consultation to ban new leasehold flats and explore an appropriate way forward. This move aims to address longstanding criticisms of the leasehold system which has been viewed as outdated and unfair to homeowners. With commonhold ensuring permanent ownership, ground rent will be cut and homeowners will have greater control over service charges, eliminating many of the pitfalls associated with leasehold ownership​. The Ministry of Housing, Communities and Local Government plans to publish the draft Leasehold and Commonhold Reform Bill later this year. This is expected to include detailed proposals for converting existing leasehold properties and implementing the changes to the commonhold regime. This legislation should provide a fairer property ownership structure, but the transition still has the potential to cause short-term uncertainty. Under the current leasehold system, many properties are owned by a third-party landlord known as a ‘freeholder’, who owns the building, while the leaseholder buys the right to occupy a flat within it for a fixed term (typically 99, 125, or 999 years). Leaseholders are responsible for paying costs such as ground rent and service charges, which are often set by third-party management companies. As a result, they’ve had limited control and transparency over these charges leading to issues like rising ground rents and high service costs, but this is set to change under new rules. Leasehold vs commonhold – what this change means for BTL landlords Commonhold properties enable flat owners to collectively own and manage the entire building, with shared areas managed collectively through a commonhold association, allowing a more collaborative approach to property management. No ground rent is charged and while third-party management companies can still be used, commonholders will have more control over their appointment. With potentially fewer charges for landlords, there should be less pressure to pass rising costs onto tenants, meaning costs could be lower and more predictable. Building management will also be governed by a shared set of rules, overseen by a committee of property owners. Landlords can be part of that committee, but decisions are made collectively. This means more transparency and a more collaborative approach to managing the property. How can brokers support landlords with commonhold properties   As the property market moves towards commonhold ownership, brokers have a vital role to play in helping landlords understand and adapt to the new structure. By educating clients on how the future ban will affect their properties, brokers can help them to make informed decisions on property management while also building trust with clients. The government is expected to publish the draft Leasehold and Commonhold Reform Bill later this year, laying the foundation for broader implementation. Ahead of this, the government also plans to consult on banning the sale of new leasehold properties, though this will depend on the establishment of a viable and scalable commonhold model. Brokers who stay up to date with the changing mortgage policies around leasehold and commonhold properties will be best placed to help landlords identify suitable lending options, restructure portfolios, and explore investment opportunities in commonhold developments. Brokers can also support clients in reassessing their risk exposure and long-term investment strategies as the market adapts. With the government aiming to make commonhold the standard tenure by the end of this parliament, mortgage brokers have an opportunity to lead in this evolving market. By staying informed, brokers can offer essential guidance to landlords, helping them adapt with confidence and future-proof their property investments.  Jonathan Stinton is head of intermediary relationships at Coventry for intermediaries The post Leasehold to commonhold: How brokers can help landlords navigate the change appeared first on Mortgage Strategy.

The Renter’s Rights Bill has moved to the report stage in the House of Lords, with landlords concerned that the legislation does not address the capacity of the courts to handle the banning of no-fault evictions.   The wide-ranging reforms left the committee stage of the Lords yesterday after peers began debating the Bill on 22 April. Its measures include, limiting rent increases to once a year, moves to end bidding wars, scrapping fixed-term tenancies as well as banning Section 21 no-fault possessions.  However, the National Residential Landlords Association warned that the Government has “failed to acknowledge the true state of the court system and its lack of readiness to handle possession cases following the end of Section 21 ‘no-fault’ evictions”.  It called on Labour to set out “a credible plan for court reform as a matter of urgency”. The landlord’s association points to Ministry of Justice data this week that shows that the average time between a landlord submitting a claim and regaining legitimate possession of a property in the first three months of 2025 rose to 32.5 weeks, from 29.8 weeks a year ago.  Once no-fault evictions are scrapped courts will have greater powers to hear, decide, process and enforce possession claims.  The housing department has said that courts will have the resources they need to handle any additional workload.  But National Residential Landlords Association chief executive Ben Beadle says: “Ministers are either unaware of the true state of the courts or are refusing to admit it.   “Their claims that the courts will be ‘ready’ for the impact of the Renters’ Rights Bill simply do not stack up.  “Seven months is an eternity for responsible landlords who may be dealing with serious rent arrears and for neighbours having to endure anti-social behaviour.  “The government must stop burying its head in the sand and commit to a fully funded, detailed and deliverable plan to ensure the courts are fit for purpose.”  However, in the Lords yesterday, housing minister Baroness Taylor said: “To end the scourge of Section 21 evictions as quickly as possible, we will introduce the new tenancy for the private rented sector in one stage.   “On that date, the new tenancy system will apply to all private tenancies.   “Existing tenancies will convert to the new system, and any new tenancies signed on or after that date will be governed by the new rules.   “There will be no dither or delay, and the abolition of Section 21, fixed-term contracts, and other vital measures in the Bill will happen as quickly as possible.”  During the General Election last July, Labour pledged to end no-fault evictions “immediately”. The post Rent Bill moves to report stage amid landlord concerns over court capacity   appeared first on Mortgage Strategy.

This week’s top stories include Nationwide and Rightmove launching a property lending check, and Knight Frank raising its house price forecast as base rate cuts are expected to support demand. Dive into these and more key updates below.  Nationwide and Rightmove launch property lending check Nationwide and Rightmove launched a digital “property lending check” feature to help homebuyers assess mortgage eligibility before viewing a property. The tool evaluated risks like flooding or short leases, providing real-time lending likelihood. Previously, buyers only knew borrowing amounts, not property-specific eligibility. The initiative aimed to streamline the UK property market, reducing delays. Experts praised the feature for preventing late-stage mortgage rejections. Rightmove planned further enhancements, while Nationwide called it a natural progression from their mortgage-in-principle tool. Knight Frank lifts house price forecast as base rate cuts ‘underpin’ demand Knight Frank raised its UK house price forecast to 3.5% for 2025, up from 2.5%, citing expected base rate cuts as a key demand driver. The Bank of England’s rate reduction to 4.25% and market predictions of further easing boosted market confidence. Halifax reported a 0.3% monthly price rise in April. Rental forecasts also increased slightly due to the tight supply. Knight Frank projected cumulative price growth of 22.8% over five years.    Nationwide latest to adjust stress rates following FCA clarification Nationwide reduced its mortgage stress rates by 0.75 to 1.25 percentage points following FCA guidance allowing lenders to assess affordability against product rates rather than revert rates. The change enabled borrowers, particularly first-time buyers using its Helping Hand scheme, to access higher loans, averaging £28,000 more. However, the Bank of England’s 15% loan-to-income cap limited its impact. Experts praised the move but called for broader regulatory reforms to further ease affordability constraints. Average two-year fix falls to lowest rate since 2022: Moneyfacts The average two-year fixed mortgage rate fell to 5.18% in May 2025—its lowest since September 2022—while five-year fixes dropped to 5.10%. Moneyfacts reported declining swap rates drove cuts, narrowing the gap between short- and long-term deals. Product availability rose to 6,993, the highest since 2007, though shelf-life shortened to 19 days. Experts noted improved options for first-time buyers but cautioned borrowers might still prefer longer fixes amid market volatility. New rules for letting agents come into force tomorrow New rules requiring letting agents to screen all landlords and tenants against UK financial sanctions lists took effect on 14 May 2025. Agents had to verify identities and report matches to authorities, removing the previous €10,000 (£8,275) rent threshold. Non-compliance risked £1 million fines. Goodlord warned that many landlords felt unprepared for the changes, which aimed to prevent sanctioned individuals from renting properties. The mandate applies to instruction for landlords and post-offer for tenants. Perenna renews credit line with ABN AMRO Perenna Bank renewed and expanded its £200 million warehouse credit facility with ABN AMRO, extending the agreement until July 2026. The deal, building on their April 2024 partnership, aimed to support Perenna’s growth in the UK mortgage market. COO Colin Bell stated the funding would enable more lending for innovative products addressing housing affordability. The move reinforced Perenna’s mission to expand homeownership opportunities through flexible financing solutions. Halifax cuts rates, including 2-year fix at sub-4% Halifax reduced mortgage rates on 22 April 2025, introducing a sub-4% two-year fixed rate at 3.94% (60% LTV, £999 fee). The lender also cut five-year fixes to 4.27% (80% LTV, £999 fee) and 4.38% (80% LTV, no fee). Two-year products at 90-95% LTV fell 0.19% to 5.15% (no fee). The reductions made Halifax one of the most competitive lenders in the market for both homebuyers and remortgagers. L&C Mortgages adopts One Mortgage System’s CRM solution London & Country Mortgages implemented One Mortgage System’s CRM solution on 13 May 2025 to streamline operations and enhance customer service. The fully integrated system improved workflow efficiency and data management for the brokerage. OMS CEO Dale Jannels praised L&C’s reputation, while L&C CEO Mark Harrington highlighted the platform’s flexibility in meeting their needs. The partnership aimed to optimise internal processes and elevate customer experiences through technological innovation. Barclays launches lowest rate this year at 3.85%, Principality cuts resi and JBSP rates Barclays launched its lowest 2025 rate at 3.85% on 12 May, cutting multiple products including a fee-free remortgage (4.18%, down 19bps) and green mortgage (4.08%). Principality also reduced residential rates by up to 0.21%, with JBSP cuts including 0.20% on two-year 75% LTV deals. The moves intensified competition as Barclays’ five-year fix fell to 3.99% and Principality trimmed cashback products, signalling a broader market rate decline. Opinion: FCA’s latest CP makes a nonsense of Consumer Duty The FCA’s CP25/11 proposal to remove mandatory mortgage advice requirements risked undermining Consumer Duty principles, argued Sebastian Murphy. The 13 May 2025 opinion piece warned that the change favoured lenders seeking to reduce broker involvement, jeopardising consumer protections. Murphy highlighted advisers’ holistic role in identifying risks like protection gaps or affordability issues, now threatened by execution-only options. Despite recent Consumer Duty emphasis on advice quality, the consultation appeared to prioritise cost savings over suitable outcomes, potentially harming both consumers and the advice sector. The post Mortgage Strategy’s Top 10 Stories: 12 May to 16 May appeared first on Mortgage Strategy.

Inflation is set to jump as a range of index-linked bills and taxes take effect when official cost-of-living data is released next week.   Deutsche Bank forecasts headline inflation will lift to 3.4% in April from 2.6% as energy and water bill rises kick in when the Office for National Statistics posts its print on Wednesday.  This data will also include changes to vehicle excise duty, council tax bills, and air passenger duty, as well as the “double whammy” of rises to the National Living Wage and employer National Insurance Contributions, says the German bank.  Deutsche Bank senior economist Sanjay Raja adds: “April inflation will present the biggest test for the Monetary Policy Committee so far this year”. Goldman Sachs analyst Sven Jari Stehn points out: “UK core inflation continues to run notably ahead of that in other countries, reflecting high services inflation and firm wage growth.”    The US bank estimates UK inflation will come in at 3.5%. The latest cost-of-living data comes after official figures showed earlier this week that the UK economy grew by a larger-than-expected 0.7% in the first three months of the year.  However, this data came before the 2 April move by US President Donald Trump to hike tariffs on more than 75 countries, which is expected to impact UK growth.  Last week, the UK struck a deal with the US to reduce or remove tariffs on some UK exports, but the baseline 10% levy, which applies to many countries, will still be charged on most British goods entering the US.  The Bank of England cut the base rate by a quarter point to 4.25% last week, the second 0.25% reduction of the year and the lowest level since May 2023.    It also lifted its forecast for the UK economy to grow by 1% this year, marking an upgrade from the 0.75% growth predicted in its February report.     However, rate-setters expect that energy prices “are still likely” to drive up inflation to 3.5% in the third quarter of the year, before “falling back thereafter”.      Money markets expect between two and three further cuts this year to boost a subdued economy that faces tariff uncertainties.  But many economists forecast that the Monetary Policy Committee may pause rate reductions at its next 19 June meeting to gauge how hot prices are running across the economy.  The post Inflation preview: Higher April bills lift cost of living   appeared first on Mortgage Strategy.