UK economy sees unexpected growth in Q2
The British government has made boosting the country's sluggish economy a priority, but in the year since its election has had only moderate success.
Recent months have seen some better news, and slowing inflation has allowed the Bank of England to cut rates, meaning average mortgage rates have dipped below 5% for the first time since 2022, when then-Prime Minister Liz Truss announced unfunded tax cuts that sent the market into turmoil.
In further good news for the government, fears that rich non-doms would leave the country after recent tax increases appear to have been overstated.
— Tom Chivers
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3 hours ago
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Mortgages as low as 3.73% as lenders follow Bank of England rate cut
Two major lenders have pushed further into sub-4% mortgage rate territory as the Bank of England (BoE) cut interest rates. First-time buyers can get a deal as low as 3.73%, depending on the size of their deposit, with Natwest (NWG.L) improving its two-year fixed deal further The average rate for a two-year fixed mortgage stands at 4.68% this week, while five-year fixed deals average 4.83%, according to data from Uswitch. The Bank of England has cut interest rates to 4%, which is providing some relief to homeowners who should see their mortgage payments go down. The primary inflation measure, the Consumer Price Index (CPI), stood at 3.6% in the 12 months to June, well above the BoE's 2% target. According to the latest figures from Rightmove (RMV.L), the average two-year fixed rate at 80% loan-to-value (LTV) has come down from 5.21% to 4.38% over the last year. Over the same period, the average five-year fixed rate at 80% LTV has fallen from 4.91% to 4.52%. Matt Smith, Rightmove's mortgage expert said: 'As expected we now have the third Bank Rate cut of the year, with the Bank continuing along its forecast trajectory. Mortgage lenders have had a bit of room to reduce rates over the last week, owing to the ongoing developments around global tariffs. "However, we expect that lenders will use the headline of today's cut as the catalyst to reduce their rates a little further, though lender competition remains fierce and we don't expect major rate drops. Read more: 10 student homes that will appeal to savvy buyers "Lenders have been competing for business in a market which has the largest supply of homes for sale in a decade. A combination of rate cuts and changes to buyer affordability criteria are helping many home-movers to responsibly borrow more towards the home that they want. "The market expects there will be one more Bank Rate cut before the end of the year, with an outside chance of two. Any further cuts would likely see this cycle repeat again — with lenders using it as an opportunity to reduce rates a little more. It bodes well for the second half of this year, with further mortgage rate reductions and stable prices likely to encourage more activity." Nationwide (NBS.L), Britain's biggest building society, has also cut the salary requirements for first-time buyers from £35,000 to £30,000, in a move it hopes will enable 10,000 more people to become homeowners. Read more: First-time buyers on £30k salary now able to apply for mortgage Amanda Bryden, head of mortgages at Halifax, said: "Challenges remain for those looking to move up or onto the property ladder. But with mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving. "Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well. "We expect house prices to follow a steady path of modest gains through the rest of the year." This week, NatWest (NWG.L) and Santander (BNC.L) both cut their mortgage rates, while all other major lenders kept deals untouched as most had already adjusted to the BoE's widely expected decision to cut interest rates. HSBC mortgage deals HSBC (HSBA.L) has a 3.94% rate for a five-year deal, unchanged from last week. For those with a Premier Standard account with the lender, this rate is 3.91%. Looking at the two-year options, the lowest rate is 3.78% with a £999 fee, again, untouched from the previous week. Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit. HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are much higher, with a two-year fix at 4.94% or 4.79% for a five-year fix. This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky. NatWest mortgage deals NatWest's (NWG.L) five-year deal is 3.85% with a £1,495 fee, a drop from the previous 3.88%. Read more: UK economic growth slows between April and June The cheapest two-year fixed deal is 3.73%, a cut from the previous 3.77%. In both cases, you'll need at least a 40% deposit to qualify for the rates. Santander mortgage deals At Santander (BNC.L), a five-year fix is 3.94% for first-time buyers, lower than the previous week's 4.01%. It has a £999 fee, assuming a 40% deposit. For a two-year deal, customers can secure a 3.82% offer, with the same £999 fee, lower than last week's 3.84%. Barclays mortgage deals Barclays (BARC.L) five-year fix this week stands at 3.99%, same as before. The lowest for two-year mortgage deals used to be 3.76% or 3.75% if you had a Premier exclusive account but that offer now comes in at 3.84% (3.83% for Premier clients). However, the lender did cut some rates this week: 4.22% 2 Yr Fixed £899 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.12% 4.63% 2 Yr Fixed £0 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.43% 5.05% 2 Yr Fixed £0 product fee, 95% LTV, Min loan £25k, Max loan £570k will decrease to 4.88% 4.75% 2 Yr Fixed £1999 product fee, 85% LTV, Min loan £2m, Max loan £5m will decrease to 4.39% 4.29% 5 Yr Fixed £899 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.12% 4.37% 5 Yr Fixed £0 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.23% 4.99% 5 Yr Fixed £0 product fee, 95% LTV, Min loan £25k, Max loan £570k will decrease to 4.80% 4.60% 5 Yr Fixed £1999 product fee, 85% LTV, Min loan £2m, Max loan £5m will decrease to 4.20% 4.12% Green Home 2 Yr Fixed £899 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.02% 4.19% Green Home 5 Yr Fixed £899 product fee, 85% LTV, Min loan £5k, Max loan £2m will decrease to 4.02% Barclays recently launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home. The initiative, known as Mortgage Boost, enables family members or friends to effectively "boost" the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit. Under the scheme, a borrower's eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, an individual with a £37,500 annual income and a £30,000 deposit might traditionally be able to borrow up to £168,375, enabling them to purchase a home priced at around £198,375. However, with Mortgage Boost, the total borrowing potential can rise substantially if a second person, such as a parent, joins the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000. Nationwide mortgage deals Nationwide's (NBS.L) lowest mortgage rate for first-time buyers is 4.14% for a five-year fix. First-time buyers are looking at 3.94% for a two-year fix, unchanged from before. Both deals require a 40% deposit and come with a £1,499 fee. However, mortgage customers who are on Nationwide's Standard Mortgage Rate (SMR) will see a decrease of 0.25%. The new SMR of 6.74% will come into effect on 1 September 2025. Rates on tracker mortgages held by existing Nationwide customers automatically decrease when Bank Rate is cut, so these will decrease to reflect the Bank Rate change from 1 September 2025. Carlo Pileggi, Nationwide's senior manager of mortgages, said: 'As the country's second largest lender, we always strive to support all parts of the market with competitive rates. This latest round of cuts across our range move even more of our rates below 4% and should put Nationwide front of mind of first-time buyers, those moving on to their next home and those looking for a new mortgage deal.' Eligible first-time buyers can apply for a mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary, down from £55,000. This is expected to support an additional 10,000 first-time buyers each year. Nationwide, which lent to more first-time buyers in 2024 than any other lender, has confirmed it has applied to the Prudential Regulation Authority to increase its high loan-to-income lending capacity. The vast majority of Nationwide's high LTI lending is done through its Helping Hand, which allows eligible first-time buyers to borrow up to six times income. This enables borrowing of up to 33% more than standard lending. Helping Hand has helped around 60,000 first-time buyers since launching in 2021. Read more: How you can still make money from flipping property The lender has also adjusted its mortgage affordability calculation by reducing stress rates by 0.75 and 1.25 percentage points, helping applicants borrow more, whether buying a first home, moving, or remortgaging. Applicants can borrow, on average, £28,000 more; however, in some remortgage cases, customers could borrow up to £42,600 more. Nationwide also reduced its standard stress rate and the rate applied to eligible first-time buyers and home movers fixing their deal for at least five years. Halifax mortgage deals Halifax, the UK's biggest mortgage lender, offers a five-year rate of 3.94% (also 60% LTV), same as before. The lender, owned by Lloyds (LLOY.L), offers a two-year fixed rate deal at 3.79%, with a £999 fee for first-time buyers, again unchanged. It also offers a 10-year deal with a mortgage rate of 4.78%. Halifax has enhanced its five-year fixed mortgage products by increasing borrowing capacity. This improvement allows borrowers to access up to £38,000 more, enabling them to secure larger mortgages based on individual incomes. Rachel Springall, finance expert at Moneyfacts, said: "The flourishing choice of low-deposit mortgages will no doubt be welcomed by borrowers looking to remortgage or are a first-time buyer. "The government has been clear that it wants lenders to do more to boost UK growth, and so a rise in product availability for aspiring homeowners is a healthy step in the right direction." Cheapest mortgage deal on the market NatWest has some of the lowest rates on the market, with a two-year fix coming in at 3.73%. The same lender also takes the crown for a five-year fix with its 3.85% deal. However both require a hefty 40% deposit. The average UK house price was £298,237 in July, according to the latest figures from Halifax, so a 40% deposit equals about £120,000. A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s. Read more: Rents set to rise as UK rental listings fall sharply, survey finds Lender April Mortgages offers buyers the chance to borrow up to six times their income on loans fixed for five to 15 years, from a deposit of 5%. Both those buying alone and those buying with others can apply for the mortgage. As part of the independent Dutch asset manager DMFCO, the company offers interest rates starting at 5.20% and an application fee of £195. Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income to help more borrowers get on the housing ladder. Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings. Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's base rate has been passed on by banks and building societies. According to UK Finance, 1.3 million fixed-mortgage deals are set to end in 2025. Many homeowners will hope the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely root for rates to remain at or near their current levels. Read more: How school fees can affect your mortgage borrowing The pros and cons of getting a mortgage into your 70s Pros and cons of lifetime ISAs
Yahoo
3 hours ago
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Is it better to rent or buy as interest rates fall? Readers have their say
Earlier this week we asked whether you thought it was better to rent or buy, following the recent cut to the interest rate. The Bank of England (BoE) lowered the rate last week to 4% from 4.25%, marking its fifth cut in a year, as the UK grapples with persistent inflation and a cooling jobs market. Although previous data from Rightmove (RMV.L) showed a rise in average rent for some properties, research released by Estate agent Hamptons on Monday showed a fall in the average private rent on newly let homes. Shop Top Mortgage Rates A quicker path to financial freedom Personalized rates in minutes Your Path to Homeownership The picture remains mixed, however and many tenants across the UK have seen their rent rise by as much as 3.4%. Read more: Mortgages as low as 3.73% as lenders follow Bank of England rate cut For prospective buyers, the BoE's decision was positive news as lower interest rates have a knock-on effect on lenders' borrowing rates, leading to cheaper mortgage deals. Many homebuyers will be considering the lower property purchase costs and deciding whether now is the right time to switch from renting to buying. Our poll received 581 votes, with a sizeable majority (83%) believing that it was indeed better to buy a property, while only 11% thought renting was the best option and 6% were undecided. Read more: Sterling hits one-month high as UK growth better than expected 8 secluded houses with no near neighbours 10 student homes that will appeal to savvy buyers Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
11 hours ago
- Yahoo
EXCLUSIVE: Net-a-porter Alums Raise $1 Million for U.K.-based Egg and Sperm Health Supplement Company Ova
Egg and sperm health brand Ova has secured a $1 million pre-seed from Era VC, Ventures Together and Syndicate Room and angel investors including Gemma Bellman, former director at Glossier and the British Beauty Council; Lisa Gordon, chairperson at Cavendish Capital; Stratos Chatzigiannis, chief executive officer of Ila Apothecary, and more. Ova, which is based in the U.K., currently offers four products, including Ova Her, a fertility and pregnancy support supplement that is the brand's bestseller; Ova Him, a sperm support supplement that is the brand's bestseller in-store; Ova Plus, a hormone support supplement, and Ova Omega, an omega-3 supplement formulated for reproductive health. More from WWD Report: Shoppers Spending $47 More Per Month Under Trump's Tariff Regime Les Tien Debuts First Los Angeles Store British Retailer Boden Set to Open First U.S. Store in Georgia 'Ova is tapping into a deeply underserved space in a truly differentiated manner,' said Claire Cherry, partner at Era VC. 'We know fertility is no longer solely a women's issue — it's a team effort, and Ova is leading the charge with a standout brand and real science. We're proud to back such an exceptional team.' Ova, which launched seven months ago, was founded by Net-a-porter alums Danielle Fox-Thomas and Kat Lestage, who were both experiencing their own fertility challenges which ultimately led to them building Ova while they each were pregnant. 'It was quite the challenge, but we like a challenge,' said Fox-Thomas, who was previously a health and beauty editor. 'I went through a round of IVF. Kat went through her own challenges, but was happily pregnant. Then I got pregnant quite quickly after my round, so we were essentially both pregnant as we were raising, giving birth and launching the brand.' She added: 'It just so happened [that] we created our own Ova babies, just to put the icing on the cake.' According to Lestage, going through this experience while raising capital allowed them to find investors who were the perfect fit. 'I do think some people probably might be and maybe were a bit intimidated by the fact that we're two women who are starting a business while at the same time growing and starting families,' said the former beauty and wellness buyer. 'For us, building a brand that is made for people who are starting and growing their families, it makes the most sense for the people who are leading that business to be going through that themselves. We wanted investors who believed in that vision.' Upon starting the brand, retailers were automatically interested given the opportunity within the category. 'Especially in the U.K., there was a lot of white space for there to be a brand that was speaking to a more modern consumer. Something as simple as our branding, is very straightforward. It is like, 'This is fertility [and] pregnancy. This is advanced sperm support. This is for your advanced hormonal support,'' Lestage said. 'We're not trying to be quiet. We're not putting babies on boxes.…It's something new and it's fresh, and we're talking to that modern consumer. That's what buyers bought into quickly.' Boots, in particular, brought on Ova before the brand had even turned on its direct-to-consumer shop. Now the brand is available in more than 900 doors with Boots, the largest pharmacy chain in the U.K., and Sainsbury's, one of the largest grocery retailers in the U.K., and will be expanding in Ireland. 'What this raise has done is allowed us to support our retailers in not going out of stock. We've expanded with Boots, moved into Republic of Ireland. We're going into more stores in Ireland in October,' Lestage said. 'Our growth with Boots has been crazy, and so this raise has really allowed us to continue to fuel that growth.…In addition to that, which we're very excited about, is we finally have been able to turn on paid ads for our DTC.' Fox-Thomas added that they are also beginning to discuss future product development. 'We're looking at PMS. We're looking at how we can best support those coming off birth control, how we can best support those with symptoms of PCOS and more regularity of cycle, and then looking at hunkering down on those who are going through assisted reproductive technologies,' Fox-Thomas said. 'We want to be known for reproductive health [and] fertility. We know this is not going away anytime soon. One in four of us will struggle or face challenges, but we want to lean to more positive, actionable products that really can help support.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
