Aaron Strutt of Trinity Financial reports that the mortgage market has been much more positive in recent weeks following a host of rate reductions and better economic news.
Barclays launches five-year fix at 4.08% as more lenders lower rates
The mortgage market has been much more positive in recent weeks following a host of rate reductions and better economic news. Barclays for Intermediaries is the latest mortgage lender to lower rates and top the best-buy tables. The bank has launched a 4.08% five-year fix and a 4.49% two-year fix, both with £899 arrangement fees.
These mortgages are available to Barclays premier customers who are purchasing a property. Applicants will need a clear credit history, an income of at least £75,000 and a 40% deposit to qualify. The minimum loan size is £5,000, and the maximum is £2,000,000. Rates are only up to 0.03% higher for non-premier customers.
Nationwide, Halifax, Santander and NatWest are just some of the other big banks and building societies to improve their mortgage pricing as we edge closer to a Bank of England base rate cut.
Mortgage lenders are doing more to attract borrowers, particularly as we enter the second half of the year, and they have lending targets to hit. For example, HSBC for Intermediaries has eased its lending policy to issue larger loans.
HSBC customers with a 5% deposit can borrow up to £570,000 rather than £500,000. Borrowers with a 10% deposit can raise up to £750,000 rather than £550,000, and those with a 25% deposit could secure a mortgage of £3 million rather than £2 million. Santander also recently increased the maximum mortgage loan size from £570,000 to £1 million for buyers with a 10% deposit.
Figures from UK Finance show that during April, the number of borrowers opting for two- and five-year fixes was almost the same, with 44% taking a two-year fix and 45% opting for a five-year fix.
Jonathan Haskel, a member of the Bank's Monetary Policy Committee, was quoted as saying he "would rather hold rates" at 5.25% until there is more certainty that inflation pressures had "subsided sustainably". This is despite the Bank of England base rate being at a 16-year high and some 732,000 mortgage deals ending in the second half of this year.
Mortgage availability improving
Figures from the latest Moneyfacts UK Trends Treasury Report reveal that mortgage rate availability has improved, particularly for first-time buyers with smaller deposits.
The number of rates available to borrowers with a 5% deposit rose to 361, the highest point in over two years, when there were 369 rates in May 2022. Overall mortgage product choice also rose month-on-month to 6,658 rate options, its highest level since February 2008, when there were 6,760 rates.
The average shelf-life of a mortgage product rose to 30 days, up from 15 days a month prior. This means lenders are making fewer rate changes, which helps stabilise the property market. Moneyfacts' lowest recorded shelf-life average was 13 days in July 2023.
NatWest introduces Airbnb permission to let policy
NatWest has introduced Airbnb-friendly mortgage terms for new and existing customers as the bank tweaks its lending rules to be more like Barclays and Metro Bank. The new rules are designed to “enhance home sharing” and ensure borrowers can confidently share a spare room or their entire home with guests.
This permission-to-let policy change will provide a welcome boost to some borrowers struggling with higher interest rates and wishing to rent their property on a short-term basis through platforms like Airbnb to help them make ends meet.
NatWest reports that the typical Host in the UK earns almost £5,500 a year on Airbnb—enough to cover 69% of the average annual mortgage payment.
If you plan to let your property on platforms like Airbnb, you must ensure your building insurance provider knows so you are covered if you need to make a claim.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage.