Welcome to our latest market update
This month, we discuss early market resilience & the reintroduction of the First Homes Fund…
Scroll on…..
As we await the next Bank of England update on the 18th of June, the UK housing market is navigating ongoing global uncertainty with reassuring resilience.
While the conflict in the Middle East continues to cast concerns over future energy prices, the mortgage market has held firm; supported by widespread repricing from lenders, unexpected UK economic growth, and stable inflation.
Despite geopolitical headwinds, the UK housing market demonstrated resilience in May. At first glance, recent reports show expected difficulties in the market. The latest index recorded a slight monthly dip of 0.6% in property values, the first of 2026. This leaves annual house price growth sitting at 1.7%, and 3-month measure remains at +1.3%.
But there are wider economic factors that offer hope for mitigating the uncertainty. This is highlighted by unexpected 0.6% GDP growth in the first quarter of 2026, which has kept the labour market stable.
Furthermore, household debt-to-income ratios are sitting at the lowest in 20 years which should help borrowers absorb higher costs. Pressure should also be lifted off the Bank of England due to lower than expected inflation.
Nevertheless, uncertainty remains and conflict in the Middle East persists as negotiations fall short.
For prospective homeowners in Scotland, the recent announcement that the First Homes Fund is reopening is fantastic news. Launching by the end of June, this shared-equity scheme provides first-time buyers with up to a £10,000 contribution towards a deposit on properties valued up to £300,000.
As the Scottish Government takes an equity share rather than charging interest or requiring monthly repayments, a deposit, which is a big barrier for many trying to get onto the property ladder, is lessened. Given the exceptional demand during the fund’s last outing, we expect the scheme to be incredibly popular.
Geopolitics remain the primary wild card for the mortgage market, with the ongoing conflict in the Middle East continuing to influence global energy and shipping costs. The “risk premium” on oil and gas exerts an underlying pressure that directly impacts swap markets – the wholesale interest rates lenders use to price fixed-rate mortgages.
This sensitivity is precisely why the Bank of England chose a hesitant, “wait-and-see” stance ahead of its April meeting rather than changing the base rate. For buyers and homeowners, this means that while a gradual downward trend in mortgage rates remains likely if global tensions ease, minor near-term pricing volatility will likely continue to be the norm.
In this environment, borrowers are weighing short-term flexibility against long-term certainty. If keeping your monthly payments entirely predictable is your top priority, a 5-year fix offers invaluable protection against global volatility at historically competitive rates.
However, if you have the financial breathing room to handle minor market shifts for the chance of catching lower rates in a year or two, a shorter-term fix is well worth discussing.
Meanwhile, first-time buyers in Scotland eyeing the First Home Fund should act immediately to get their mortgage in principle and paperwork ready, as this vital funding is expected to be snapped up within days of its June launch.
Research by Mortgage Advice Bureau discovered a massive knowledge gap among aspiring buyers regarding their own purchasing power.
Our findings suggested, 50% of first-time buyers are completely unaware that their borrowing power has improved since this time last year. Because of broader affordability criteria, improved lender flexibility, and stabilising rates, many buyers are now in a position to borrow up to £30,000 to £40,000 more than they could have previously. The research also highlighted that 73% of aspiring buyers do not even know that 5% deposit mortgages are widely available.
The cost-of-living crisis, the spike in interest rates, and the stream of negative economic news have left first-time buyers feeling defensive. Many assume that because the market was inaccessible to them in 2023 or 2024, it remains inaccessible today.
Saving for a deposit remains the most heavily cited barrier to entry, but the real barrier is often a lack of clarity. Aspiring buyers are spending years saving diligently, unaware that recent developments have moved in their favour and homeownership might already be within their grasp.
Research suggests first-time buyers, despite their hesitation, remain a driver of market growth. This is because for many, the alternative is the private rental market. With rents continuing to rise to record highs, the financial motivation to buy remains incredibly strong. MAB’s research highlights this drive perfectly: 47% of prospective buyers would purchase a home immediately if their monthly mortgage repayments matched their current rent.
This demographic is resilient, highly motivated, and vital to the overall health of the housing ecosystem. When first-time buyers purchase starter homes, it frees up the chain, allowing second-steppers to move and injecting liquidity into the entire market.
Below we have listed the top rates available across a range of LTVs. Please let us know if you need any additional information. NB: Danske dont lend in Scotland.
| 95% | 90% | 85% | 75% | 60% |
|---|---|---|---|---|
|
5.22% - Skipton
5.34% - TSB
5.36% - Nationwide
|
4.87% - Virgin
4.89% - Co-op
4.89% - Nationwide
|
4.64% - Virgin
4.66% - Nationwide
4.66% - Leeds
|
4.55% - Halifax
4.56% - HSBC
4.59% - Nationwide
|
4.39% - Barclays
4.40% - Nationwide
4.42% - Halifax
|
| 95% | 90% | 85% | 75% | 60% |
|---|---|---|---|---|
|
5.24% - Skipton
5.25% - Nationwide
5.27% - Santander
|
4.75% - Barclays
4.82% - Virgin
5.84% - HSBC
|
4.67% - Virgin
4.69% - Nationwide 4.70% - HSBC |
4.56% - HSBC
4.57% - Virgin 4.59% - Nationwide |
4.46% - HSBC
4.49% - Nationwide 4.55% - Halifax |
Halifax and Lloyds have lowered remortgage rates by up to 14 basis points, while first-time buyer and home mover prices have reduced by up to 12bps.
Kensington has made substantial cuts of up to 35bps on core buy-to-let rates, while residential deals have been trimmed by up to 15bps. Gen H is dropping five-year rates between 60% and 80% loan-to-value by up to 20bps at 5.30pm today, while two-year rates at the same LTV are falling by 15bps.
Link opens a third party website
According to HMRC, the recent surge in year-on-year transactions looks dramatic, but it is heavily skewed by a quiet April 2025. Last year, activity plummeted after buyers rushed to complete purchases in March ahead of stamp duty threshold changes.
When comparing month-to-month, the market has cooled slightly. Seasonally adjusted residential transactions fell 3% from March’s total of 103,910. On a non-seasonally adjusted basis, April saw 85,880 transactions across the UK—a 16% drop from the previous month, but still 51% higher than last year’s stamp duty-affected slump.
Link opens a third party website
“Excellent service makes arranging the mortgage straight forward and easy. Excellent personnel who are extremely helpful and explain everything. Would definitely use if needed again. Have successfully obtained two mortgages with their help“
A recent survey by Landbay highlights a significant drop in landlord confidence within the buy-to-let market, with over 80% describing the sector as unstable or unpredictable. This volatility has led many to pause or reduce their activity. 35.3% reported scaling back, while 21.8% delayed their investment plans.
Furthermore, nearly half of respondents feel less confident in their ability to secure BTL finance, heavily relying on mortgage brokers to navigate the shrinking and unpredictable product landscape.
Despite these concerns, landlord activity remains steady, with around half recently completing or progressing a mortgage application. However, priorities have shifted: while competitive rates remain important, landlords now place a higher premium on certainty, consistency, and clear communication from lenders.
With 18.8% forced to switch products mid-application and nearly 28% having to act rapidly to secure deals, borrowers are looking for reassurance that product offers will stand and cases will progress smoothly through uncertain market conditions.
The information pertained in here is not intended for public consumption, it has been prepared for the partners and friends of Mortgage Advice Bureau. Please do not share with consumers or buyers. Thank you.
Your home may be repossessed if you do not keep up repayments on your mortgage.
In some instances, there may be a fee for mortgage advice. We will not charge a fee to those purchasing a new build home who contact us via the details provided. Other branches of Mortgage Advice Bureau may charge a fee. The actual amount you pay to them will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Image courtesy of eveningtao