Welcome to our latest market update
This month, we discuss the Bank of England decision and the First Homes Fund launch.…
Scroll on…..
This month the Bank of England has voted to hold the base rate at 3.75% for the 4th consecutive time.
This has been accompanied with a general lowering of rates by lenders, who are balancing global uncertainty with mixed national economic news.
The Bank of England has held interest rates at 3.75% for the fourth consecutive meeting following a 7-2 vote by the Monetary Policy Committee. Governor Andrew Bailey cited uncertainty surrounding high energy prices stemming from the recent Middle East conflict as the primary driver. Although recent oil price drops following a US-Iran peace deal are encouraging, Bailey warned that past energy shocks mean “inflationary pressure” remains in the pipeline.
The Bank’s goal is to prevent this from becoming sustained inflation above its 2% target. It now expects inflation to hit 3.25% by the end of the year which is lower than previously forecast, but still off-target.
The wider economic impact is already visible. UK inflation held steady at 2.8% in May, job vacancies have dropped to a five-year low, and average two-year fixed mortgage rates have climbed to 5.59%. Additionally, households face a 13% increase in the energy price cap this July.
Recent HMRC data reveals that the provisional, seasonally adjusted volume of UK residential property sales reached 98,450 in May 2026. This represents a 17% increase compared to May 2025, though it marks a 2% dip from April 2026. Before seasonal adjustments, residential transactions stood at 92,390, a 13% year-over-year rise and a 7% month-over-month increase.
In the non-residential sector, seasonally adjusted transactions totalled 10,080 in May 2026, showing a slight decrease from the previous year but a minor uptick from April. Meanwhile, the non-seasonally adjusted total for non-residential sales was 9,380, reflecting a 4% decline from May 2025 and a 5% drop from April 2026.
The Middle-East remain uncertain, swinging between peace, ceasefire negotiation, and hostility. The result is an elevated price on Oil and Gas to account for the volatility of these commodities.
The inflationary effect is expected to be seen later in the year and the extent of the inflation will impact the rates chosen by the Bank of England and lenders.
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 quickly.
We are here to help – please just let us know if you have any questions!
Below we have listed the lowest rates available across a range of LTVs.
Please note these are for illustration purposes only – not all clients may qualify for these. If you need any additional detail, please let us know,
| 95% | 90% | 85% | 80% |
|---|---|---|---|
|
5.25% - West Brom
|
4.89% - Virgin
|
4.64% - Coventry
|
4.64% - Coventry
|
| 75% | 70% | 65% | 60% |
|---|---|---|---|
|
4.59% - Coventry
|
4.59% - Coventry
|
4.49% - Coventry
|
4.49% - Coventry
|
| 95% | 90% | 85% | 80% |
|---|---|---|---|
|
5.09% - Barclays
|
4.65% - Coventry
|
4.64% - Coventry
|
4.64% - Coventry
|
| 75% | 70% | 65% | 60% |
|---|---|---|---|
|
4.59% - Coventry
|
4.59% - Coventry
|
4.49% - Coventry
|
4.49% - TSB
|
A major wave of mortgage repricing is underway this week, with several major UK lenders slashing rates across a variety of products.
Specialist lender Molo leads the cuts by up to 53 basis points, followed by significant reductions from NatWest, Santander, TSB, Barclays, and Kensington across various fixed-rate, remortgage, and first-time buyer deals.
Link opens a third party website
It applies on all properties, including new builds, and goes up to 90% for eligible applicants without permanent rights to reside in the UK. Previously, this was limited to 75% LTV.
Still subject to length of UK residency
Income requirements still apply for borrowers to be eligible for a higher LTV.
Where the applicants have a UK residency of one year or more, a minimum income of £50,000 for a single applicant or £75,000 for joint applicants is required.
If the applicants have a UK residency of less than one year, a minimum income of £200,000, single or joint, is required.
Customers without permanent rights to reside in the UK looking to borrow at 75-90% LTV will require additional evidence of affordability.
Where income falls below £200,000, applicants must provide verification of time in the UK.
Link opens a third party website
“James Campbell was my mortgage advisor with MAB and he could not have been more helpful, James and his team took great care of myself and all my needs and I would recommend them to anyone going forward.”
– Declan B
Later life lending encompasses financial products like lifetime mortgages (equity release) and Retirement Interest-Only (RIO) mortgages, designed specifically for homeowners aged 55 and over. These tools offer flexible ways to unlock property wealth, serving two powerful purposes: helping younger generations buy a house, and enabling older buyers to secure their ideal next home.
Many young buyers struggle to save a deposit. Later life lending allows older relatives to bridge this gap. By using a lifetime mortgage, parents or grandparents can unlock tax-free cash from their property to gift as a “living inheritance.” This lump sum provides a crucial deposit, drastically lowering the barrier for first-time buyers.
For older individuals, later life lending is a powerful tool for moving. If a retiree wants to downsize into an energy-efficient new build property, a lifetime mortgage or RIO can bridge the funding gap between their current home’s sale price and the cost of the new build.
Similarly, equity can be released from a primary residence to purchase a second property. This allows retirees to fund a coastal retreat or holiday home without depleting their liquid savings or pensions, transforming their property wealth into tangible lifestyle upgrades.
Collated and developed by Maven
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.
Images courtesy of fxquadro