blog mortgage118

Author: David Sampson

  • 1.5 Million Homes Impacting the UK Mortgage Market

    1.5 Million Homes Impacting the UK Mortgage Market

    Recent research has revealed that over 1.5 million homes in the UK are considered ‘unmortgageable’ by mainstream lenders. This significant figure highlights a growing concern in the mortgage market, as many properties fail to meet traditional lending criteria, impacting potential buyers and investors alike.

    TL;DR: More than 1.5 million UK homes are deemed ‘unmortgageable’ due to factors like construction type and condition; this affects borrowers seeking financing options.

    What Makes a Property Unmortgageable?

    According to the findings, approximately 6% of the UK’s 28 million residential properties may struggle to secure mainstream mortgage finance. Factors contributing to this classification include:

    • Construction type, such as thatched cottages and high-rise flats
    • Lease length
    • Condition of the property, including those lacking functioning kitchens or bathrooms
    • Proximity to commercial premises

    These criteria can severely limit the options available for buyers looking to finance their property purchases.

    Why Are Buyers Interested in Unmortgageable Properties?

    Despite the challenges, many buyers are drawn to unmortgageable properties for various reasons. Among those who have considered purchasing such properties:

    • 44% believe these homes offer better value for money compared to traditional properties.
    • 31% are motivated by the chance to renovate or restore the property.
    • 28% aim to add value before selling for a profit.
    • 31% see a worthwhile risk-to-reward ratio, despite acknowledging the process may be difficult.
    • 21% feel the potential rewards outweigh the risks.
    • 19% are willing to take on properties that others might avoid.

    This interest suggests a segment of the market is willing to embrace the challenges associated with these properties for the potential of greater returns.

    What This Means for the Mortgage Market

    The implications for buyers and investors are significant. With over a quarter (28%) of respondents citing lower purchase prices as the main attraction, this can be particularly appealing for first-time buyers and buy-to-let investors. For those purchasing as their primary residence, this figure rises to 32%. Additionally, 35% of buy-to-let investors are motivated by the prospect of rental income from such properties.

    However, potential buyers should be aware that 21% of respondents reported having their mortgage applications rejected, and 32% indicated limited access to lenders willing to consider their applications. This highlights the importance of understanding the mortgage market and exploring alternative financing options when considering unmortgageable properties.

    Frequently Asked Questions

    What should I consider when buying an unmortgageable property?

    When considering an unmortgageable property, assess its condition, potential renovation costs, and the availability of financing options. Understanding the risks involved is important.

    How can I finance an unmortgageable property?

    Alternative financing options may include specialist lenders who cater to unmortgageable properties or considering cash purchases if feasible. Researching these options is essential.

  • Semi-Commercial Mortgage Lending to Exceed £1 Billion

    Semi-Commercial Mortgage Lending to Exceed £1 Billion

    The semi-commercial mortgage sector is poised for significant growth, with lending expected to surpass £1 billion by the end of 2026. This surge is driven by an increase in transaction volumes and average loan sizes, indicating a robust market for landlords and investors in mixed-use properties.

    TL;DR: Semi-commercial mortgage lending is projected to exceed £1 billion by 2026, with a 20% increase in lending from the previous year; this trend benefits landlords and investors seeking mixed-use properties.

    What is Driving the Growth in Semi-Commercial Mortgages?

    In the second quarter of 2026, semi-commercial lending reached £242 million, marking a 20% increase from £201 million in the same period last year. This growth reflects a broader trend in the semi-commercial mortgage market, which encompasses properties that combine residential and commercial uses. The number of transactions also rose by 13%, from approximately 415 in Q2 2025 to 470 in Q2 2026, suggesting a healthy appetite for these types of loans.

    How Are Average Loan Sizes Changing?

    Average loan sizes have seen a notable increase of about 6% year on year, climbing from £484,000 to £515,000. This rise in loan size has contributed to the overall growth in lending value, indicating that borrowers are taking on larger projects or investing in more valuable properties. This trend is essential for investors looking to finance bigger developments in the mixed-use sector.

    What This Means for Landlords and Investors

    For landlords and investors, the expanding semi-commercial mortgage market presents opportunities for diversification and growth. With an increase in active lenders from 25 to 28 over the past year and a nearly 20% rise in dedicated semi-commercial mortgage products to 94, borrowers have more options available. The average loan-to-value ratio has also increased from 64% to 67%, allowing investors to use their assets more effectively.

    Challenger banks and specialist lenders are stepping in where mainstream banks have scaled back, particularly after the 2008 financial crisis. This shift has created a more competitive environment, benefiting borrowers with more tailored products and potentially better rates. As the market continues to grow, stakeholders should keep an eye on lending trends and product offerings to capitalize on emerging opportunities.

    What Are Current Interest Rates Like?

    Average headline fixed rates have eased slightly to around 6.70%, down from 6.85% in the first quarter of 2026. Challenger and specialist lenders are offering rates that range from approximately 6.0% to 9.0%, depending on the complexity of the asset and the transaction. This slight reduction in rates may encourage more borrowers to enter the market, further driving up lending volumes.

    Frequently Asked Questions

    What types of properties qualify for semi-commercial mortgages?

    Semi-commercial mortgages are designed for properties that have both residential and commercial elements, such as a shop with flats above or a mixed-use development. These properties must be secured against a single title.

    How can I find the best rates for semi-commercial mortgages?

    To find the best rates, borrowers should compare offers from various lenders, including challenger banks and specialist lenders. It’s also beneficial to consult with a mortgage broker who specializes in commercial mortgages to access a wider range of products and rates.

  • RAW Capital Partners Launches New Bridging Loan Service

    RAW Capital Partners Launches New Bridging Loan Service

    RAW Capital Partners has expanded its offerings by introducing bridging loans, a move that enhances its specialist lending portfolio. This development is significant for landlords and property investors seeking swift financing options, particularly in the current dynamic property market.

    TL;DR: RAW Capital Partners now offers bridging loans ranging from £100,000 to £4 million, targeting landlords and investors needing quick access to funds; loans are secured against UK residential property with a maximum loan-to-value ratio of 60%.

    What Are the Key Features of RAW’s Bridging Loans?

    The new bridging loans from RAW Capital Partners are unregulated, first-charge loans secured against UK residential properties. Borrowers can access loans starting from £100,000 up to £4 million, with terms ranging from three to 18 months. The maximum loan-to-value (LTV) ratio is set at 60%, and interest rates are tiered based on the LTV.

    Who Can Benefit from These Bridging Loans?

    This new offering is particularly beneficial for foreign nationals, UK expatriates, and Channel Islanders who have previously invested in UK buy-to-let properties. Following an expansion of lending criteria in December 2025, UK residents can now also apply for these loans, broadening the potential customer base significantly.

    What This Means for Landlords and Investors

    The introduction of bridging loans by RAW Capital Partners provides landlords and property investors with a fast and reliable financing option. With the RAW Mortgage Fund managing over £220 million in assets, the lender is well-positioned to deliver quick decisions and funding, which is important for those looking to seize investment opportunities in a competitive market.

    Frequently asked questions

    What is a bridging loan?

    A bridging loan is a short-term financing option that helps borrowers bridge the gap between purchasing a new property and selling their existing one or securing long-term financing.

    How do I apply for a bridging loan with RAW Capital Partners?

    To apply for a bridging loan, contact RAW Capital Partners directly or work through a mortgage broker who can assist you with the application process.

  • Deciding Whether to Fix Your Mortgage Rate Now

    Deciding Whether to Fix Your Mortgage Rate Now

    With mortgage rates fluctuating, many borrowers are faced with the decision of whether to secure a fixed-rate mortgage now or wait for potential rate decreases. As your fixed-rate mortgage approaches its end in January 2027, understanding the current market dynamics is essential for making an informed choice.

    TL;DR: If your mortgage ends in January 2027, you can lock in a deal now but should also monitor rates until completion; balancing the risk of rising rates against potential future decreases is key.

    What Should You Consider When Deciding to Fix?

    When contemplating whether to fix your mortgage rate, it’s important to weigh the risks involved. Currently, many borrowers are experiencing the pressure of high rates compared to previous fixed-rate deals. For instance, if you are currently enjoying a low rate of 1.9%, the prospect of moving to a higher rate can be daunting. However, waiting for rates to drop could also mean missing out on securing a deal that may be more favourable than what’s available later.

    How Can You Secure a Deal Now and Still Monitor Rates?

    Fortunately, you don’t have to choose one option over the other. As your mortgage is set to end in January 2027, you are in the ideal position to start looking at deals from July or August 2026. This allows you to lock in a rate now while still having the flexibility to review and potentially switch your mortgage right up to your completion date. This strategy can help mitigate the risks associated with fluctuating mortgage rates.

    What Factors Could Impact Future Mortgage Rates?

    Several factors can influence the direction of mortgage rates, including geopolitical events and economic indicators. While some analysts predict a potential decrease in rates later in 2026, the uncertainty surrounding these predictions means that borrowers must remain vigilant. Keeping an eye on the economic climate and any announcements from financial authorities can provide valuable insights into the future of mortgage rates.

    What This Means for Borrowers

    For borrowers nearing the end of their fixed-rate mortgage, the current environment presents both challenges and opportunities. While the prospect of higher rates can be concerning, the option to secure a deal now while monitoring the market offers a strategic advantage. It’s advisable to consult with mortgage brokers or financial advisors to navigate this complex market effectively. For more information, you can explore residential mortgages or use our mortgage calculator to assess your options.

    Frequently Asked Questions

    Should I fix my mortgage rate now or wait?

    It depends on your risk tolerance. If you lock in a rate now, you protect yourself from potential increases, but waiting could yield lower rates if they drop later in the year.

    What happens if rates rise before I secure a deal?

    If rates rise before you secure a deal, you may end up paying a higher interest rate on your mortgage. Therefore, monitoring the market closely is essential.

  • Bank of England Holds Mortgage Rates at 3.75%

    Bank of England Holds Mortgage Rates at 3.75%

    The Bank of England has decided to maintain the Base Rate at 3.75%, marking the fifth consecutive time it has held rates steady. This decision comes as the central bank continues to combat inflationary pressures exacerbated by geopolitical tensions in the Middle East. With three members of the Monetary Policy Committee advocating for a rate increase, the prospect of higher borrowing costs looms for consumers.

    TL;DR: The Bank of England’s Base Rate remains at 3.75%, affecting borrowers and potential homebuyers; expectations of future rate hikes may impact mortgage deals.

    What does the Bank of England’s decision mean for borrowers?

    The decision to keep the Base Rate at 3.75% means that those on tracker mortgages will not see an immediate change in their repayments. However, with the Monetary Policy Committee showing signs of division—six members voting to hold rates and three pushing for a 0.25% increase—borrowers should prepare for potential rate hikes in the near future. This uncertainty could affect affordability for many, particularly those considering remortgaging or purchasing a new home.

    How will this impact mortgage rates?

    As the Bank of England maintains its current rate, lenders are likely to adjust their fixed-rate mortgage offerings in anticipation of future increases. Recent trends indicate that major lenders have already begun raising rates in response to rising swap rates, which are influenced by the ongoing instability in the Strait of Hormuz. Borrowers looking for new mortgage deals may find that rates are on the rise, making it essential to act quickly if they hope to secure more favorable terms.

    What this means for homebuyers and investors

    For homebuyers and property investors, the Bank’s decision underscores the importance of being proactive in securing mortgage deals. With expectations of further rate increases before the end of the year, those planning to remortgage or buy should be aware that the cost of borrowing may soon rise. This could lead to higher monthly repayments and affect overall affordability, particularly for first-time buyers who are already facing challenges in a competitive market.

    Frequently asked questions

    Will my tracker mortgage payments change?

    No, since the Bank of England has held the Base Rate at 3.75%, your tracker mortgage payments will remain unchanged for now.

    Should I consider remortgaging now?

    If you are considering remortgaging, it may be wise to act sooner rather than later, as further rate hikes are anticipated, which could increase your borrowing costs.

  • RAW Capital Partners Launches Bridging Loans in UK

    RAW Capital Partners Launches Bridging Loans in UK

    RAW Capital Partners, a specialist lender based in Guernsey, has expanded its product offerings by introducing bridging loans secured against UK residential properties. This move is significant as it allows a broader range of borrowers, including foreign nationals and UK residents, to access quick financing solutions for property investments.

    TL;DR: RAW Capital Partners now offers bridging loans from £100,000 to £4 million for terms of three to 18 months; this change benefits landlords and investors seeking fast funding options.

    What are the Key Features of RAW’s Bridging Loans?

    The newly launched bridging loans are unregulated and come with first-charge security against residential properties in the UK. Borrowers can access loans ranging from £100,000 to £4 million, with a maximum loan-to-value (LTV) ratio of 60%. The interest rates are tiered based on the LTV, providing flexibility for different borrowing scenarios. These loans are funded through the RAW Mortgage Fund, which boasts over £220 million in assets under management.

    Who Can Benefit from These Bridging Loans?

    The introduction of bridging loans by RAW Capital Partners is particularly beneficial for landlords and property investors looking for quick financing solutions. With terms of three to 18 months, these loans can facilitate timely property acquisitions or renovations, enabling investors to act swiftly in a competitive market. The recent expansion of lending criteria to include UK residents further broadens the potential borrower base.

    What This Means for Borrowers and Brokers

    This development is a positive sign for brokers and borrowers alike, as it enhances the options available in the bridging loan market. Speed and certainty are highlighted as key qualities of RAW’s offering, which may help streamline the property investment process. As the demand for bridging finance continues to grow, brokers should keep an eye on how this new product can meet their clients’ needs.

    Frequently asked questions

    What is a bridging loan?

    A bridging loan is a short-term financing option used to bridge the gap between the purchase of a new property and the sale of an existing one.

    How can I apply for a bridging loan with RAW Capital Partners?

    Interested borrowers can contact RAW Capital Partners directly or work with a mortgage broker to explore their bridging loan options.

  • UK House Price Growth Slows: What It Means for Mortgages

    UK House Price Growth Slows: What It Means for Mortgages

    House price growth in the UK has slowed significantly, with an increase of just 0.1% in July, according to the latest data from Nationwide. This marks a drop from a more robust 2.2% annual rise in June, indicating a cooling market that could impact mortgage rates and buyer sentiment.

    TL;DR: House prices rose only 0.1% in July, with the average property now costing £277,542; this slowdown may affect mortgage competition and buyer activity.

    What is the current state of house prices?

    The average house price in the UK now stands at £277,542. This modest increase of 0.1% in July follows a more substantial rise earlier in the year. The annual growth rate has eased to 1.8%, suggesting that the housing market is losing some of the momentum seen in previous months. High stock levels, now at a 12-year peak, indicate that demand may not be keeping pace with supply.

    How do geopolitical factors influence the mortgage market?

    Geopolitical tensions, particularly the ongoing conflict between Iran and the US, have contributed to rising energy prices and market interest rates. These external pressures can impact mortgage rates, as lenders adjust their offerings in response to changing economic conditions. The recent decision by the Bank of England to maintain interest rates at 3.75% reflects a cautious approach amid these uncertainties.

    What this means for buyers and investors

    For potential buyers and investors, the slowdown in house price growth may present both challenges and opportunities. While the easing growth could signal a less competitive market, it also raises concerns about the overall economic environment. Buyers may find that lenders are more willing to compete on mortgage pricing if inflation continues to ease, which could lead to more favourable mortgage terms.

    What should mortgage brokers watch for next?

    Mortgage brokers should closely monitor inflation trends and the Bank of England’s monetary policy decisions, as these will significantly influence mortgage rates. The current market dynamics, with high stock levels and subdued buyer interest, could lead to more competitive mortgage products as lenders seek to attract serious buyers. Understanding these shifts will be important for brokers advising clients in this changing market.

    Frequently asked questions

    How will the slowdown in house price growth affect mortgage rates?

    The slowdown may lead to increased competition among lenders, potentially resulting in more attractive mortgage rates for borrowers if inflation eases.

    What should first-time buyers do in this market?

    First-time buyers should stay informed about market trends and consider their options carefully. With house prices stabilising, now may be a good time to explore mortgage options and secure favourable terms.

  • Key Mortgage Market Updates: July 2026 Highlights

    Key Mortgage Market Updates: July 2026 Highlights

    The UK mortgage market is currently experiencing significant shifts, with important updates affecting borrowers, lenders, and investors alike. Notably, Prime Minister Andy Burnham has confirmed that there will be no changes to stamp duty in the upcoming autumn Budget, while Aldermore has increased its maximum loan-to-value (LTV) ratio to 98%. These developments come amid a backdrop of fluctuating mortgage rates and evolving market dynamics.

    TL;DR: Aldermore has raised its maximum LTV to 98%, impacting employed borrowers seeking high-value loans; meanwhile, no changes to stamp duty are expected in the autumn Budget.

    What are the implications of Aldermore’s LTV increase?

    Aldermore’s decision to raise its maximum LTV to 98% represents a significant shift in its residential mortgage offerings. This change allows employed borrowers to access higher loan amounts with a smaller deposit, potentially making homeownership more attainable for many. The introduction of a five-tier product structure aims to cater to customers with complex financial situations, enhancing support for those who may have previously struggled to secure financing.

    How will the stamp duty announcement affect the market?

    With Prime Minister Burnham ruling out any changes to stamp duty in the next Budget, borrowers and investors can plan their financial strategies with greater certainty. The absence of reforms to this tax means that potential buyers will not face increased costs associated with property purchases in the near term. This stability could encourage more transactions in the housing market, particularly for first-time buyers and those looking to move up the property ladder.

    What does the latest mortgage network data reveal?

    The latest data from Network Consulting indicates a shifting market within the mortgage network sector. While Primis remains the largest network despite a slight decline in appointed representatives, Stonebridge, HL Partnership, and ValidPath have all reported net growth in adviser firms. This movement suggests a competitive environment where networks are adapting to changes in borrower needs and market conditions, which could influence the availability and pricing of mortgage products.

    What this means for borrowers and investors

    For borrowers, the increase in Aldermore’s LTV ratio provides a new opportunity to secure financing with a lower deposit, which could be particularly beneficial for first-time buyers or those looking to purchase in high-value areas. However, as lenders like Halifax, BM Solutions, TSB, and Leeds Building Society are raising selected mortgage rates by up to 20 basis points, borrowers should be vigilant about securing competitive deals before further rate increases occur.

    Investors should also take note of the overall market trends, including the slowing annual house price growth of 1.3% and the unique situation in London, where prices are predicted to continue falling. Understanding these dynamics will be important for making informed investment decisions in the current climate.

    Frequently asked questions

    What is the current state of mortgage rates in the UK?

    Mortgage rates in the UK are under pressure, with average new rates rising to 4.35%. Borrowers should monitor these changes closely, as lenders adjust their pricing in response to market conditions.

    How can I compare mortgage rates effectively?

    To compare mortgage rates effectively, consider using online tools that aggregate offers from various lenders. This can help you find the best deals tailored to your financial situation, ensuring you secure the most competitive rate available.

  • Newcastle BS Reports 9% Growth in Mortgage Market Lending

    Newcastle BS Reports 9% Growth in Mortgage Market Lending

    Newcastle Building Society has reported a notable 9% increase in mortgage lending, reaching £623 million in the first half of 2026. This growth comes despite ongoing pressure on profit margins, highlighting the lender’s resilience in a challenging mortgage market.

    TL;DR: Newcastle Building Society’s mortgage lending rose to £623 million, a 9% increase; this reflects improved customer retention and overall market stability despite margin pressures.

    How Has Newcastle BS Improved Customer Retention?

    Newcastle Building Society has significantly enhanced its customer retention rates, retaining 80% of mortgage maturities in the first half of 2026, compared to just 64% in the same period last year. This improvement is important for maintaining a stable mortgage portfolio and indicates that borrowers are finding value in the society’s offerings, which may help mitigate the impact of rising interest rates and economic uncertainty.

    What Are the Financial Highlights?

    The mutual reported net core residential lending of £289 million for the six months ending June 30, a substantial increase from £156 million in the same timeframe last year. Total mortgage balances rose by £235 million to £5.9 billion. However, net interest income saw a decline from £51 million to £48.3 million, and the net interest margin decreased from 1.57% to 1.35%. This decline in margin reflects the competitive pressures within the mortgage market.

    What Does This Mean for Borrowers and Landlords?

    For borrowers, particularly those with residential mortgages, the increased retention rates and solid lending figures from Newcastle Building Society may signal a stable lending environment. However, the reduction in net interest income and margin suggests that lenders may be tightening their lending criteria or increasing rates to maintain profitability. Landlords with buy-to-let properties, which account for £353 million of Newcastle’s mortgage portfolio, should also be aware of the potential for higher borrowing costs as lenders navigate these pressures.

    What Are the Future Projections for the Mortgage Market?

    Newcastle Building Society is operating under a cautious outlook, anticipating a decline in UK house prices by 0.8% in 2026 and 1.8% in 2027, before a return to growth in 2028. This forecast suggests that borrowers and investors should prepare for a potentially challenging market ahead, with implications for property values and lending conditions. Keeping an eye on current mortgage rates will be essential for making informed decisions.

    Frequently asked questions

    What is the current state of mortgage lending in the UK?

    The UK mortgage market is experiencing pressures on profit margins, but lenders like Newcastle Building Society are reporting growth in lending and improved customer retention.

    How can borrowers prepare for potential changes in mortgage rates?

    Borrowers should stay informed about current mortgage rates and consider locking in fixed-rate deals if they anticipate rising costs. Regularly reviewing mortgage rate comparisons can help in making informed decisions.

  • Should You Fix Your Mortgage Rate Now? Insights for Borrowers

    Should You Fix Your Mortgage Rate Now? Insights for Borrowers

    As mortgage rates fluctuate, borrowers nearing the end of their fixed-rate deals face a pivotal decision: should they secure a new rate now or wait for potential decreases? With many current deals significantly higher than existing low rates, understanding the implications of each choice is essential.

    TL;DR: Borrowers with fixed-rate mortgages ending soon are weighing whether to lock in current higher rates or wait for potential decreases; this decision could impact their financial future significantly.

    What Should You Consider When Fixing Your Mortgage?

    If your fixed-rate mortgage is set to expire soon, like in January 2027, now is the time to evaluate your options. You’re likely experiencing a rate of 1.9%, which is considerably lower than the current market offerings. This situation creates a dilemma: locking in a new rate now could mean missing out on potentially lower rates later, while waiting might lead to securing a higher rate if the market continues to rise.

    What Are the Risks of Waiting?

    The primary risk of adopting a ‘wait and see’ approach is the possibility that mortgage rates may increase further. Factors such as geopolitical tensions and economic shifts can influence these rates unpredictably. If rates rise, you could miss out on securing a more favourable deal now, leaving you with a higher payment when it’s time to remortgage.

    What Are the Benefits of Fixing Now?

    Locking in a mortgage rate now can provide peace of mind, especially if you’re currently benefiting from a low rate. By securing a deal in July or August 2026, you can still monitor the market until your mortgage completes in January 2027. This strategy allows you to hedge against rising rates while keeping an eye on any potential decreases.

    What This Means for Borrowers

    For borrowers nearing the end of their fixed-rate period, the decision to fix now or wait is important. Those currently enjoying low rates should be particularly vigilant, as the market is unpredictable. It’s advisable to consult with mortgage brokers or financial advisors to assess your specific situation and explore the best options available. Understanding the current market trends and potential future movements can help you make an informed decision.

    Frequently Asked Questions

    What should I do if my mortgage is ending soon?

    If your mortgage is nearing its end, consider evaluating current rates and consulting with a mortgage advisor. You can secure a deal now while monitoring the market for any changes until your completion date.

    How can I keep track of mortgage rate changes?

    Staying informed about mortgage rates can be done through financial news, market reports, and by consulting mortgage brokers who can provide insights into current trends and forecasts.