Category: Mortgage

Barclays is cutting selected fixed rates for residential purchase and remortgage by up to 0.33 percentage points, laying the gauntlet down to other lenders with its table-topping rates, writes Jo Thornhill.

The latest reductions will push Barclays five-year purchase fixed-rate to the top of the best buy tables with a rate of 4.09% (60% loan to value) with an £899 fee. Barclays Premier banking customers can secure the same deal at a rate of 4.08%.

Barclays has also slashed remortgage rates and is offering two-year fixed rates from 4.70% (4.67% for Premier banking customers) with a £999 fee (60% LTV) and equivalent five-year rates from 4.36% (4.31% for Premier customers).

Coventry for Intermediaries has cut selected residential fixed rates by up to 0.18 percentage points and deals across its buy-to-let range by up to 0.15 percentage points.

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NatWest has launched an “Airbnb mortgage” to help borrowers who are struggling to pay their mortgage amid the cost of living crisis.

The new mortgage deal will offer homeowners more “flexibility” if they wish to share a spare room or their entire home with guests.

New and existing customers at the bank will no longer need to apply and pay for a “Consent to Let,” providing they follow the listing rules.

Customers must only let a room in their home for up to 90 days of the year and it has to be through an “approved platform” like Airbnb.

According to NatWest, the typical host in the UK earns almost £5,500 a year on Airbnb. This is enough to cover 69 per cent of the average annual mortgage payment which can provide “a significant boost” to families and households who are struggling to make ends meet.

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Competition between mortgage lenders has intensified ahead of a key decision on interest rates by the Bank of England.

A host of lenders have made reductions to the cost of new fixed-rate mortgages in recent days.

Brokers expect further cuts to come, but mortgage rates remain much higher than homeowners became accustomed to for a decade.

Lenders’ funding costs have hinted at falling with the Bank forecast to cut benchmark interest rates for the first time in four years.

Analysts believe that move, from the current 16-year high of 5.25%, could come on 1 August, although this remains far from certain.

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House prices in the UK were largely flat in June, down just 0.2% on a monthly basis, the latest Halifax House Price Index has found.

On an annual basis, house prices were up marginally, with growth of 1.6%, similar to the 1.5% recorded a month prior.

The average house price now stands at £288,455, down slightly from £288,931 in May.

The strongest property price growth was recorded in Northern Ireland, where growth of 4% was seen in the year to June and on a monthly basis, houses rose 3.3%.

The average price of a property in the country is now £192,457. 

Of England’s regions, the North West saw the greatest house price rise, up 3.8% annually to an average of £231,351.

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Tory voters lost faith in the ability of Rishi Sunak’s party to manage the housing market ahead of the election, figures reveal.

A results breakdown shows the Conservatives haemorrhaging support to Labour and the Liberal Democrats in seats with the most mortgage holders.

It came despite inflation falling to the 2 per cent target and rate cuts expected this summer.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said mortgage holders were ‘unconvinced’ that Sunak’s plan to fix the economy was working.

The Bank of England began to hike rates in late 2021 to bring rising prices under control.

But the mini-budget unveiled by Liz Truss – who has now lost her seat – sent borrowing costs up in September 2022.

Rates are still at a 16-year peak of 5.25 per cent, which has piled on financial pressure.

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The report says: “This marks the fifth consecutive month of rises. These rates remain slightly lower compared to December 2023. The average two-year fixed rate is slightly higher compared to January 2024.”  

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