Mortgage Strategy’s Top 10 Stories: 20 Jan to 24 Jan
This week’s top stories see the government release a planning paper for ‘faster, less costly’ major projects and Nationwide confirm rate changes across range. Explore these developments and more below:
Nationwide confirms rate changes across range
Nationwide Building Society has announced selected rate changes across its mortgage products. Increases include a 75% LTV two-year fixed rate for new customers rising to 4.50% with a £999 fee and 4.76% with no fee, while a five-year fixed at the same LTV is now 4.49% with a fee and 4.64% without.
First-time buyers with 85% LTV on a two-year fix face rates of 4.83% with a fee and 5.14% without. Some rates remain unchanged, such as a 90% LTV three-year fix for first-time buyers. Remortgage customers with 80% LTV see an increase to 4.94% with a fee, but the 5.09% no-fee rate stays the same. Existing customers and homemovers also face increases, including a 75% LTV five-year fix now at 4.34% with a fee and 4.48% without.
Barclays offers JBSP Mortgage Boost products
Barclays has launched its Mortgage Boost scheme to help first-time buyers increase their borrowing capacity by allowing family or friends to join their mortgage application without being named on the property deeds.
For example, a single borrower earning £37,500 with a £30,000 deposit could typically borrow up to £168,375, but with a second applicant on the same income, this could rise to £270,000—enabling a home purchase of up to £300,000.
The bank highlights that this initiative addresses affordability challenges amid rising house prices and deposit costs, as the average UK first-time buyer age has now climbed to nearly 34.
Reeves reveals plan to build homes near train stations to boost growth
Chancellor Rachel Reeves has announced plans to boost housebuilding near train stations as part of wider infrastructure reforms aimed at driving economic growth.
The upcoming Planning and Infrastructure Bill, set for spring, will cut red tape to accelerate major projects, supporting the government’s goal of 1.5 million new homes over five years. Reeves has also backed a third Heathrow runway and regeneration projects, including one around Old Trafford.
The government is working with Greater Manchester to release land for development near transport hubs. With homebuilding at its lowest in over a decade, these reforms aim to reverse the decline and promote economic growth.
Debate needed over lower mortgage stress tests: BoE’s Bailey
Bank of England Governor Andrew Bailey has called for a public debate on the trade-off between easing mortgage stress tests to help first-time buyers and the risk of higher repossessions. Speaking before the Treasury Committee, he noted that while mortgage regulations had prevented a 2008-style crisis, high deposits remain a major barrier to homeownership.
Bailey acknowledged the government’s push for growth but stressed the need for balance in financial stability. Lowering stress tests without increasing housebuilding could drive up prices, warned Bank executive Nathanaël Benjamin. Regulators are reviewing lending rules, but no changes have been scheduled yet.
Easing mortgage rules lifts default risk, binds regulator’s hands: Moody’s
Moody’s has warned that easing mortgage lending rules in the UK, where household debt is high, could increase default risks and limit regulators’ ability to manage future financial instability. The UK is among six heavily indebted European nations loosening lending standards, raising concerns for banks and mortgage-backed securities.
While relaxed rules may not necessarily boost mortgage volumes, they could lead to riskier lending, particularly from challenger banks. However, Moody’s notes that the UK’s strong labour market and resilient banks should help mitigate potential downturn risks, despite rising concerns over mortgage arrears in the long term.
NatWest and Melton BS announce rate changes
NatWest has raised mortgage rates by up to 0.17%, including a five-year fixed remortgage at 60% LTV increasing to 4.44%, while also making some cuts, such as a 90% LTV first-time buyer two-year fix reducing to 5.39%.
Meanwhile, Melton Building Society has lowered rates by up to 0.20% across its 80% LTV fixed products, with a two-year fix now at 4.90% and a five-year fix at 4.59%, both with no application fees and a free valuation. Melton aims to support brokers and borrowers with these changes, encouraging homeownership.
Paragon Bank launches BTL mortgage origination platform
Paragon Bank has launched a new buy-to-let mortgage origination platform designed to streamline applications, provide quicker decisions, and reduce processing times. The system uses data from Companies House, Experian, and Hometrack to pre-populate applications, tailoring requirements to each case.
AI assists underwriters by extracting and validating information, while brokers receive real-time updates. Intermediaries can also upload and store client property schedules for future applications, reducing paperwork. Managing director Louisa Sedgwick says the platform, developed over two years with broker input, will offer a faster, smarter, and more flexible experience.
Govt releases planning paper for ‘faster, less costly’ major projects
The government has released a working paper outlining reforms to accelerate decision-making on major infrastructure projects, such as roads and power plants, to drive economic growth. The proposed changes aim to streamline planning, reduce delays, and improve the Nationally Significant Infrastructure Projects regime, which has slowed in recent years.
Key reforms include regular policy reviews, limiting community objections, and ensuring planners consider broader infrastructure objectives. The Planning and Infrastructure Bill, set for spring, seeks to create a more strategic, outcome-focused system to support economic growth and the UK’s transition to clean energy.
Mortgage affordability improving but borrowers still stretched: Nationwide
UK housing affordability has seen a slight improvement over the past year, as wage growth outpaced house price increases and borrowing costs eased slightly. However, affordability remains stretched, with first-time buyers still facing high house prices relative to earnings and significant deposit hurdles. Mortgage payments for an average buyer remain above long-term norms, and many rely on family support for deposits.
Despite these challenges, house prices rose by 4.7% in 2024, and first-time buyer mortgage approvals remained strong. Experts suggest affordability may gradually improve if earnings continue to outpace house price growth and borrowing costs decline.
Brokers feeling more bullish about 2025: Investec
A growing 91% of UK mortgage brokers expect business growth in the next 12 months, up from 2024, despite concerns over macro-economic volatility and securing repeat clients.
Investec Bank’s latest broker event highlighted that high-net-worth (HNW) clients face challenges in using diverse income sources for affordability assessments, with financing speed and high LTV ratios also key concerns.
While optimism in the mortgage market remains strong, brokers are increasingly focused on maintaining client relationships and navigating economic uncertainties in 2025.
