Mortgage Strategy’s Top 10 Stories of the Week
This week’s high headlines embrace a Court of Appeal ruling that clarifies the definition of ‘arrears’ in a key mortgage case, and the FCA growing dealer charges by 2.4% for the yr forward. Explore these and different main trade updates under.
Court of Appeal clarifies which means of ‘arrears’ in mortgage case
The Court of Appeal clarified the which means of ‘arrears’ underneath the debt respite scheme in a mortgage case involving lenders Interbay and Seculink and borrower David Forbes. Forbes, who had fallen into arrears, utilized for a psychological well being disaster moratorium. This was the primary time the courtroom thought-about how 2020 protections utilized to secured money owed, significantly called-in capital sums. The courtroom dominated that the principal quantity of secured debt, even when referred to as in earlier than a moratorium, was non-eligible. This resolution supplied welcome certainty for collectors, confirming the scheme doesn’t limit enforcement of secured lending past missed instalment funds.
Santander agrees TSB buy to make it fourth largest UK mortgage lender
Santander agreed to purchase TSB for £2.65bn, a transfer set to set up it because the UK’s fourth-largest mortgage lender. The (*30*) banking group acknowledged this acquisition strengthens its place in a core market, increasing its buyer base and lending capability. The deal, agreed with TSB-owner Banco Sabadell, aimed to ship substantial worth by elevated market scale, entry to low-risk mortgages, and operational efficiencies. This buy marked Santander’s continued funding within the UK market, regardless of earlier studies of a possible withdrawal.
FCA lifts dealer charges by 2.4% for coming yr
The Financial Conduct Authority elevated charges for mortgage lenders and brokers by 2.4% for the 2025/26 monetary yr, following a big rise final yr. The regulator’s total annual funding requirement grew to £783.5m. Fees for ‘dwelling finance suppliers, advisers and arrangers’ totalled £23.5m. Additionally, the minimal flat charge levy for mortgage advisers for the Financial Ombudsman Service rose to £95, and cash steerage levies for the A.18 group additionally noticed a 32% improve.
Nationwide cuts charges to as little as 3.81%
Nationwide Building Society diminished rates of interest on numerous mortgage merchandise, aiming to entice first-time consumers and present prospects. Reductions of up to 0.20% utilized to two, three, and five-year fastened charges throughout completely different loan-to-value tiers. New charges began from 3.81% for brand spanking new and present prospects transferring dwelling, and three.94% for first-time consumers. Remortgage merchandise additionally noticed cuts, ranging from 3.89%. This transfer adopted related charge reductions by different main lenders, offering welcome information for debtors looking for new offers.
BoE mortgage stats paint a extra constructive image
Bank of England information revealed a extra constructive mortgage market in May after April’s weak figures. Net borrowing of mortgage debt by people rose to £2.1bn, and the annual progress charge for web mortgage lending barely elevated. Net mortgage approvals for home purchases grew by 2,400 to 63,000, marking the primary improve since December 2024. Approvals for remortgaging additionally rose considerably. Experts famous these traits indicated elevated shopper affordability and lender confidence, probably pushed by easing rates of interest.
What lies forward for home costs?
After an preliminary post-stamp obligation slowdown, the UK housing market confirmed indicators of recalibration and a combined image. While Rightmove reported a report common asking worth in May, a 10-year excessive in listings indicated a buyer-favoured market. Zoopla’s index confirmed a bounceback in gross sales, attributed to elevated inventory and eased mortgage affordability. Experts predicted modest home worth progress for 2025 and past, with regional variations. The market’s future remained depending on inflation, rates of interest, and continued housing undersupply, with some smaller landlords exiting the market.
Santander permits debtors to select product switch deal begin dates
Santander carried out new flexibility for product switch begin dates for brokers’ purchasers. From Friday, for decrease fixed-rate or short-term tracker loans, prospects may select to begin their new deal instantly upon supply acceptance or the day after their present deal ended. For the identical or greater charges, the brand new product commenced the day after the prevailing deal concluded. Standard variable charge or lifetime tracker merchandise allowed speedy switch. This coverage additionally applies to unaccepted presents issued earlier than July 4th.
Softening jobs market signal of ‘downwards’ charge path: BoE Bailey
Bank of England Governor Andrew Bailey reiterated his forecast for steadily falling rates of interest, citing a softening jobs market. He famous that common wage progress had slowed, which he believed would assist deliver inflation down to the two% goal. While the Monetary Policy Committee desired wage progress under 5%, Bailey indicated that indicators of labour market softening may present confidence for future borrowing value reductions. Investors anticipated additional quarter-point charge cuts by year-end, with a excessive chance of a minimize subsequent month.
Halifax trims costs by up to 10bps, Santander minimize charges by up to 16bps
Halifax and Santander each introduced charge reductions throughout numerous mortgage merchandise. Halifax trimmed charges by up to 10 foundation factors on residential homemover, first-time purchaser, remortgage, and product switch offers, additionally extending completion dates. Santander minimize charges by up to 16 foundation factors on new enterprise first-time consumers, homemovers, and landlord ranges, together with particular new construct and buy-to-let merchandise. These changes mirrored a aggressive mortgage market, aiming to entice various debtors with improved fixed-rate presents.
Barclays lowers remo charges to 3.93%, HSBC and Market Harborough minimize costs
Barclays considerably diminished residential remortgage and buy charges, together with a five-year fastened remortgage to 3.93%. HSBC additionally lowered residential and buy-to-let charges throughout numerous fastened and remortgage merchandise. Concurrently, Market Harborough Building Society trimmed its commonplace variable charge to 7.59% and minimize residential and let mortgage charges, together with these for expats, with variable charges diminished by up to 0.45%. These widespread cuts mirrored a aggressive market, pushed by falling swap charges and expectations of a future Bank of England base charge minimize.
