blog mortgage118

Author: David Sampson

1.5 Million UK Homes Unmortgageable: Impact on Mortgage Market
In this article:
Recent research indicates that over 1.5 million homes in the UK are classified as ‘unmortgageable’ by mainstream lenders, significantly impacting the mortgage market. This situation arises from various factors including construction type, lease length, and property condition, which restrict many buyers from securing standard mortgage finance.

TL;DR: More than 1.5 million UK homes are deemed unfit for standard mortgages, affecting 6% of residential properties; this limits financing options for many potential buyers.

What Makes a Home Unmortgageable?

Properties can be deemed unmortgageable for several reasons. Common examples include thatched cottages, high-rise flats, and homes situated near commercial premises. Additionally, properties lacking essential amenities like functioning kitchens or bathrooms often fall into this category. These factors contribute to lenders’ reluctance to finance such properties, leaving many buyers without traditional mortgage options.

Who Is Affected by This Issue?

The implications of having 1.5 million homes classified as unmortgageable extend to various groups, including first-time buyers, investors, and landlords. A significant portion of buyers—44%—believe that these properties offer better value compared to more conventional homes. Among those considering these properties, 31% are motivated by the opportunity to renovate or restore, while 28% aim to increase property value before selling for profit.

What This Means for the Mortgage Market

For prospective buyers and investors, the classification of homes as unmortgageable presents both challenges and opportunities. Many buyers are drawn to the lower purchase prices associated with these properties, with 28% citing this as their primary motivation. For buy-to-let investors, the prospect of rental income is a significant incentive, with 35% of respondents highlighting this as their main attraction.

However, the challenges are evident; over 21% of respondents reported having mortgage applications rejected, and 32% found themselves with a limited pool of lenders willing to consider their applications. This situation underscores the need for buyers to be well-informed about the risks and rewards involved in pursuing unmortgageable properties.

What Should Buyers Watch Next?

As the mortgage market continues to evolve, potential buyers interested in unmortgageable properties should stay informed about changes in lending criteria and seek out alternative financing options. Engaging with specialist lenders or exploring renovation loans may provide viable pathways for securing funding. Additionally, understanding the local property market and assessing the potential for value appreciation will be important for making informed investment decisions.

Frequently asked questions

What types of properties are typically classified as unmortgageable?

Properties such as thatched cottages, high-rise flats, and those lacking essential amenities like kitchens or bathrooms are often deemed unmortgageable by mainstream lenders.

How can buyers secure financing for unmortgageable properties?

Buyers can explore alternative financing options, such as specialist lenders or renovation loans, to secure funding for unmortgageable properties.
July 31, 2026
Paragon Cuts Buy-to-Let Rates: Key Updates for Landlords
In this article:
Paragon Bank has announced a reduction in rates across a selection of five-year fixed-rate buy-to-let mortgages. This move is significant for landlords as it reflects recent changes in swap rates, offering more competitive financing options.

TL;DR: Paragon Bank has reduced rates on five-year fixed-rate buy-to-let mortgages, impacting landlords seeking better financing options; the refreshed range includes products for various LTVs and cashback offers.

What Changes Have Been Made to Buy-to-Let Rates?

The updated offering from Paragon includes various products available at different loan-to-value (LTV) ratios. The range features options designed for properties with varying energy performance certificate (EPC) ratings. Additionally, the refreshed products include options for houses in multiple occupation (HMOs) and multi-unit blocks (MUBs).

Who Benefits from These Rate Cuts?

This rate reduction primarily benefits landlords looking to finance their buy-to-let properties. The new product range includes options with nil-fee, percentage-fee, and fixed-fee structures, along with selected products offering cashback. This flexibility allows landlords to choose a mortgage that best fits their financial strategy.

What This Means for Landlords

For landlords, the reduction in rates could lead to significant savings over the term of the mortgage. With the introduction of competitive rates, particularly for environmentally friendly properties, landlords may find it easier to manage their cash flow and invest in energy-efficient upgrades. As the market adjusts, landlords should keep an eye on further rate movements and consider how these changes might impact their investment strategies.

Frequently asked questions

What are the new rates for buy-to-let mortgages?

The new rates for five-year fixed-rate buy-to-let mortgages from Paragon include options for green mortgages and HMOs.

How can landlords benefit from these rate cuts?

Landlords can benefit from lower borrowing costs, flexible fee options, and potential cashback offers, making it easier to finance their properties.
July 31, 2026
Bank of England Holds Rates: Impact on Mortgage Market
In this article:
The Bank of England has decided to maintain the base rate at 3.75%, signalling a cautious approach as it evaluates ongoing inflationary pressures and global economic conditions. This decision is significant for borrowers, brokers, and lenders, as it reflects the current economic climate and its potential impact on mortgage rates and housing market stability.

TL;DR: The Bank of England’s base rate remains at 3.75%, providing temporary stability for borrowers; however, ongoing inflation and geopolitical tensions could influence future rate changes.

Why Did the Bank of England Hold Rates?

The Bank of England’s decision to keep the base rate unchanged comes as inflation has undershot forecasts for three consecutive months, recently easing to 2.6%. This indicates that the central bank is taking a measured approach, allowing it to monitor the effects of global events, particularly the ongoing conflict in the Middle East, on the UK economy. The decision was largely anticipated by market analysts, who noted that the current economic indicators did not necessitate an increase in rates at this time.

How Does This Affect Mortgage Borrowers?

For mortgage borrowers, the hold at 3.75% provides a brief respite from rising costs. However, it’s important to note that while the base rate remains stable, lenders are still adjusting their mortgage products in response to fluctuating swap rates. Recently, the average two-year fixed mortgage rate increased to 5.11%, up from 4.25% before the conflict escalated. This means that borrowers may still face higher costs when securing new fixed-rate deals, despite the Bank’s decision to hold rates.

What This Means for Landlords and Investors

Landlords and property investors should remain vigilant as the Bank’s decision may influence the housing market’s supply dynamics. Research indicates that an additional 260,000 homes could enter the market within a year if there is greater certainty regarding moving timelines. However, the ongoing financial pressures on households could dampen demand. Investors should also be aware that the current stability does not eliminate the risk of future rate increases, especially if inflationary pressures rise again due to external factors, such as energy costs.

What Should Brokers and Lenders Watch Next?

Brokers and lenders are advised to keep a close eye on upcoming economic indicators and the potential for changes in energy prices, which could lead to a rise in inflation towards 3.5% later this year. The Monetary Policy Committee will need to assess how these factors influence wages and consumer prices before making any further decisions regarding the base rate. The next scheduled meeting in November may be pivotal for determining the trajectory of interest rates.

Frequently asked questions

Will mortgage rates continue to rise despite the hold?

Yes, while the Bank of England has held the base rate steady, lenders are still adjusting their mortgage products based on swap rates and funding costs, which may lead to higher mortgage rates.

How does the geopolitical situation impact UK mortgage rates?

The ongoing geopolitical tensions, particularly in the Middle East, can create volatility in the financial markets, affecting swap rates and, consequently, mortgage pricing for borrowers.
July 31, 2026
Property Professionals Share Insights on July House Prices
In this article:
The latest insights from property professionals reveal a modest rise in house prices and ongoing challenges for buyers in the UK property market. July saw house prices increase by just 0.1%, with annual growth slowing to 1.8%. This stagnation reflects broader economic uncertainties, particularly rising mortgage rates and geopolitical tensions.

TL;DR: House prices rose by only 0.1% in July, with annual growth at 1.8%; rising mortgage rates and geopolitical tensions are impacting buyer confidence.

What Do the Latest House Price Figures Indicate?

According to the Nationwide House Price Index, the average property price in the UK now stands at £277,542. The slight increase of 0.1% in July follows a more robust growth of 2.2% in June, indicating a slowdown in the housing market. This trend is significant for potential buyers and investors, as it suggests a more cautious approach to property transactions.

How Are Mortgage Approvals and Rates Affecting Buyers?

In June, net mortgage approvals rose slightly to 58,200, although this figure remains below the six-month average. The Bank of England’s recent decision to maintain the base interest rate at 3.75% aims to provide stability amidst rising mortgage rates. However, affordability remains a pressing concern for many buyers, particularly as rates have begun to increase again in recent weeks.

Property Professionals Share Insights on Market Trends

For buyers, the current market conditions necessitate a careful approach. The flat property prices suggest that while there may be opportunities for negotiation, the rising mortgage rates could limit affordability. Investors should remain vigilant, as the ongoing geopolitical tensions, particularly the conflict in the Middle East, may continue to influence market dynamics and interest rates. The Bank of England’s steady approach to interest rates, combined with June’s lower inflation figures, is expected to help inspire confidence among borrowers and lenders.

What Are the Predictions for the Housing Market Moving Forward?

Looking ahead, the housing market is expected to face challenges, especially with the upcoming school year potentially igniting a new house-hunting season. Property professionals note that while the market is currently resilient, the true test will come in September. The balance between supply and demand, alongside the impact of rising mortgage rates, will be critical in shaping future trends. For those considering a move, using a mortgage calculator can help assess affordability in this changing environment.

Frequently Asked Questions

What should buyers consider in the current market?

Buyers should focus on affordability, as rising mortgage rates may affect their purchasing power. Negotiating on price could be beneficial given the current flat property values.

How do geopolitical tensions impact the housing market?

Geopolitical tensions can lead to volatility in interest rates and inflation, affecting buyer confidence and mortgage affordability. This can slow down market activity and influence property prices.
July 31, 2026
Newcastle BS Sees 9% Rise in Mortgage Lending Amid Market Pressures
In this article:
Newcastle Building Society has reported a notable 9% increase in mortgage lending, reaching £623 million despite facing pressure on profit margins. This growth is significant for the mortgage market, particularly for borrowers and brokers navigating an uncertain economic environment.

TL;DR: Newcastle Building Society’s mortgage lending rose to £623 million, a 9% increase; this reflects improved customer retention and a focus on borrower value amid economic challenges.

How Did Newcastle BS Improve Customer Retention?

The mutual lender has successfully improved its customer retention rates, with 80% of mortgage maturities being retained in the first half of the year, up from 64% the previous year. This increase indicates a stronger relationship with existing borrowers, which is important in a competitive mortgage market. The enhanced retention rate suggests that borrowers are finding value in staying with Newcastle BS, which may be an attractive option for those considering remortgaging or looking for new deals.

What Are the Financial Implications for Newcastle BS?

Despite the rise in lending, Newcastle BS experienced a decline in net interest income, falling from £51 million to £48.3 million. This decrease, alongside a reduction in the net interest margin from 1.57% to 1.35%, has impacted the underlying operating profit, which dropped from £15.9 million to £14.9 million. These figures highlight the challenges faced by lenders in maintaining profitability while offering competitive rates in the current mortgage market.

What This Means for Borrowers and Investors

For borrowers, the increase in lending and improved retention rates suggest that lenders like Newcastle BS are committed to providing value, even in a challenging environment. Borrowers with existing mortgages may benefit from competitive remortgage options as lenders strive to retain their clientele. Investors should note that Newcastle BS’s mortgage portfolio remains predominantly residential, with £5.3 billion in prime residential lending. This focus could signal a stable investment opportunity in the residential sector, especially as the society anticipates a slight decline in UK house prices in the coming years.

What Are the Current Trends in the Mortgage Market?

Newcastle BS’s performance reflects broader trends in the mortgage market, where lenders are adapting to economic uncertainties. The society’s weighted economic scenario predicts a 0.8% drop in UK house prices in 2026, followed by a further 1.8% decrease in 2027 before a return to growth in 2028. Borrowers should stay informed about these trends, as they may influence mortgage rates and lending criteria moving forward. Additionally, the proportion of mortgages with loan-to-value ratios above 90% rose to 9.3%, indicating that more borrowers are taking on higher debt relative to their property values, which could affect lending risks.

Frequently Asked Questions

What should borrowers consider when remortgaging?

Borrowers should evaluate their current mortgage terms, compare current mortgage rates, and consider their financial situation to determine if remortgaging is beneficial.

How can investors assess the stability of a mortgage lender?

Investors can assess a lender’s stability by reviewing their financial performance, customer retention rates, and the overall health of their mortgage portfolio.
July 31, 2026
July House Price Growth Slows in the Mortgage Market
In this article:
House price growth in the UK has slowed in July, reflecting a subdued housing market amid ongoing economic uncertainty. According to the latest data from Nationwide, annual house price growth decreased to 1.8% in July, down from 2.2% in June. The average UK house price now stands at £277,542, a slight increase from £277,484 in the previous month. This shift signals potential challenges for borrowers and investors in the mortgage market.

TL;DR: Annual house price growth fell to 1.8% in July, indicating a cooling housing market; this impacts borrowers and investors as economic uncertainty persists.

What Factors Are Influencing House Prices?

The current slowdown in house price growth can be attributed to several factors, including geopolitical tensions and fluctuating energy prices. The ongoing conflict between Iran and the US has contributed to rising energy costs, which in turn affects market interest rates. Additionally, financial market expectations regarding the Bank of England’s interest rate trajectory have shown volatility, influenced by inflationary pressures both domestically and internationally.

How Long Are People Staying in Their Homes?

Nationwide’s analysis reveals that homeowners are now spending an average of 14 years in the same property. This figure varies significantly based on housing tenure: those who own their homes outright typically remain for around 24 years, while private renters tend to stay for about five years. This trend indicates a potential stagnation in the housing market, as fewer people are moving between tenures.

What This Means for the Mortgage Market

For borrowers, the slowing growth in house prices may suggest a more cautious approach to purchasing property. With the Bank of England holding interest rates steady for the fifth consecutive meeting, the mortgage market remains relatively stable. However, potential buyers should remain vigilant as economic uncertainties could influence future borrowing costs. Investors may also need to reassess their strategies, particularly if the trend of prolonged homeownership continues, which could limit the availability of properties for investment.

Frequently Asked Questions

What should borrowers consider in the current market?

Borrowers should evaluate their financial stability and consider the implications of potential interest rate changes. It’s advisable to stay informed about current mortgage rates and seek professional advice when necessary.

How can investors adapt to the changing housing market?

Investors may need to adjust their strategies by focusing on long-term rental properties or exploring opportunities in emerging markets. Staying updated on market trends and economic indicators will be important for making informed decisions.
July 31, 2026
Bank of England Holds Rates: Impact on Mortgages Explained
In this article:
The Bank of England has decided to maintain the base rate at 3.75%, reflecting a cautious approach amid ongoing inflation concerns and global economic uncertainties. This decision is significant for borrowers, lenders, and property professionals as it provides a moment of stability in a fluctuating market.

TL;DR: The Bank of England’s base rate remains at 3.75%, providing stability for borrowers; however, ongoing inflation and global events may still impact mortgage rates.

Why Did the Bank of England Hold Rates?

The Bank of England’s decision to keep the base rate unchanged at 3.75% comes as inflation has been below expectations, easing to 2.6% last month. This trend has allowed policymakers to adopt a wait-and-see approach, assessing the broader economic implications of global events, particularly geopolitical tensions. The central bank’s cautious stance aims to balance inflation pressures with the affordability challenges faced by households.

How Does This Affect Mortgage Rates?

While the base rate remains stable, lenders continue to adjust their mortgage products in response to changing swap rates. These rates, which influence fixed mortgage deals, have shown volatility, and a hold on the base rate does not guarantee that product pricing will remain static. Currently, the average two-year fixed mortgage rate has risen to 5.11%, a notable increase from 4.25% prior to recent geopolitical tensions. Borrowers should be aware that while the hold may provide temporary relief, the financial pressures built up over the past few years remain significant.

What This Means for Borrowers and Landlords

For borrowers, the decision to hold the base rate offers a reprieve from immediate financial strain, but it does not alleviate the pressures of rising mortgage costs. Landlords should also be mindful of the evolving market, as the demand for property remains influenced by the broader economic environment. The anticipated Q4 Budget and the new government’s economic priorities may further shape market dynamics, particularly in the context of debt consolidation needs among homeowners.

What Should Investors Watch Next?

Investors and property professionals should keep a close eye on upcoming economic indicators and the potential for future rate adjustments. The Bank of England’s Monetary Policy Committee will likely reassess the situation in November, especially if energy costs continue to rise, impacting inflation expectations. Additionally, the housing market could see increased activity if more clarity is provided regarding the timeline for moving home, potentially adding 260,000 homes to the market within a year.

Frequently Asked Questions

What should borrowers do in light of the unchanged rates?

Borrowers should evaluate their current mortgage products and consider whether refinancing or securing a fixed-rate deal is beneficial, especially as average rates have increased.

How can landlords prepare for potential changes in the market?

Landlords should stay informed about economic developments and consider the impact of rising costs on tenant affordability, which could influence rental demand and property values.
July 31, 2026
RAW Capital Partners Launches Bridging Loans for UK Investors
In this article:
RAW Capital Partners, a Guernsey-based specialist lender, has expanded its offerings by introducing bridging loans secured against UK residential property. This move is significant for landlords and investors seeking quick financing options, as it provides a new avenue for accessing funds efficiently.

TL;DR: RAW Capital Partners now offers bridging loans ranging from £100,000 to £4 million, aimed at landlords and property investors; these loans are available for terms of three to 18 months with a maximum LTV of 60%.

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 funds between £100,000 and £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. This structure allows for flexibility depending on the borrower’s equity position.

Who Can Benefit from These Bridging Loans?

These bridging loans are particularly beneficial for foreign nationals, UK expatriates, and Channel Islanders who have been investing in UK buy-to-let properties. Following an expansion in December 2025, UK residents are also eligible, broadening the potential borrower base. The swift funding capabilities of RAW Capital Partners are designed to meet the urgent needs of property investors.

What This Means for Property Investors

The introduction of bridging loans by RAW Capital Partners enhances the financing options available to property investors, especially those looking for quick access to capital. With a significant fund of over £220 million under management, RAW is well-positioned to provide speed and certainty in the lending process, important for investors needing to act quickly in a competitive market.

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, often used in property investments.

How does the LTV ratio affect my borrowing?

The loan-to-value (LTV) ratio determines how much you can borrow against your property’s value; a lower LTV typically means better interest rates and terms.
July 31, 2026
Bank of England Holds Rates: What It Means for Mortgages
In this article:
The Bank of England has decided to maintain the base rate at 3.75%, reflecting a cautious approach amidst ongoing inflation concerns and global uncertainties. This decision impacts borrowers, lenders, and property professionals as they navigate a volatile market.

TL;DR: The Bank of England’s base rate remains at 3.75%, providing stability for borrowers; however, ongoing inflation and geopolitical tensions continue to affect mortgage rates and affordability.

Why Did the Bank of England Hold Rates?

The Bank of England’s decision to keep the base rate unchanged was largely anticipated, as recent inflation data has been lower than expected, with the Consumer Price Index (CPI) falling to 2.6%. This marks three consecutive months of inflation undershooting forecasts, allowing policymakers to adopt a wait-and-see stance. The Bank is closely monitoring the effects of global events, particularly the ongoing conflict in the Middle East, which could influence future economic conditions.

How Does This Impact Mortgage Rates?

While the base rate remains steady, lenders are still adjusting their mortgage products in response to fluctuating swap rates. The average two-year fixed mortgage rate has recently increased to 5.11%, up from 4.25% prior to the conflict in Iran. This indicates that even with a stable base rate, borrowers may not see the same stability in mortgage pricing, as lenders adjust to market conditions.

What This Means for Borrowers and Investors

For borrowers, the decision to hold rates provides a temporary reprieve from further financial pressure, but it does not alleviate the challenges posed by rising living costs and previous rate hikes. The current environment encourages borrowers to focus on securing favorable deals rather than speculating on future rate changes. Investors and landlords should be aware that demand for properties may increase if more certainty is established in the housing market, potentially adding 260,000 homes within a year.

What Should We Watch Next?

Looking ahead, the Bank of England’s next steps will depend on how inflation trends evolve, particularly with rising energy costs expected to impact consumers later in the year. The Monetary Policy Committee (MPC) will need to evaluate whether these costs translate into higher wages and prices, influencing future base rate decisions, possibly as soon as November. Additionally, the upcoming Q4 Budget may introduce new economic priorities that could further affect the housing market.

Frequently asked questions

Will mortgage rates go down soon?

While the Bank of England has held the base rate steady, mortgage rates are influenced by various factors, including swap rates and lender funding costs. As such, mortgage rates may continue to fluctuate despite a stable base rate.

How can I prepare for potential rate increases?

Borrowers should consider locking in fixed-rate mortgages if they anticipate future rate increases. It’s also advisable to review personal finances and explore options for debt consolidation to manage financial pressures effectively.
July 31, 2026
Bank of England Holds Rates: Impact on Mortgage Rates
In this article:
The Bank of England has decided to maintain the base rate at 3.75%, reflecting a cautious stance amidst ongoing inflation concerns and global economic uncertainties. This decision is significant for borrowers, brokers, and lenders as it provides a moment of stability in a fluctuating market.

TL;DR: The Bank of England’s base rate remains at 3.75%, providing stability for borrowers; however, ongoing geopolitical tensions and inflation pressures continue to affect mortgage rates and affordability.

Why Did the Bank of England Hold Rates?

The decision to keep the base rate unchanged was largely anticipated due to recent inflation data, which showed a decline to 2.6%—lower than previous forecasts. The Bank is taking a wait-and-see approach, assessing the impact of global events, particularly geopolitical tensions, on the UK economy. This cautious strategy aims to balance inflation control with economic stability.

How Does This Affect Mortgage Rates?

While the base rate is stable, mortgage lenders are still adjusting their product pricing based on swap rates and funding costs. Recent trends indicate that average mortgage rates have risen, with the two-year fixed rate currently at 5.11%, up from 4.25% before the onset of geopolitical tensions. This means that borrowers looking for fixed-rate mortgages may face higher costs, even with the base rate unchanged.

What This Means for Borrowers and Landlords

For borrowers, the hold on the base rate offers a temporary reprieve from further immediate financial pressure. However, it does not alleviate the financial strain that has built up over the past couple of years. Landlords and property investors should remain vigilant as the housing market continues to respond to external pressures. The potential for an increase in housing supply exists, with an estimated 260,000 additional homes possibly entering the market if more certainty is provided regarding moving timelines.

What Should Brokers and Lenders Watch Next?

Brokers and lenders need to monitor the ongoing geopolitical situation and its potential impact on inflation and energy prices. The Monetary Policy Committee (MPC) will likely reassess the base rate in its November meeting, particularly if energy costs rise, which could lead to higher inflation. The upcoming Q4 Budget may also influence market dynamics, especially regarding debt consolidation demand, regardless of the base rate’s status.

Frequently Asked Questions

Will mortgage rates continue to rise?

While the Bank of England has held the base rate steady, mortgage rates are influenced by swap rates and lenders’ funding costs. As these factors fluctuate, borrowers may see continued variations in mortgage pricing.

What should I consider when applying for a mortgage now?

Borrowers should assess their financial situation carefully, considering how recent rate trends may affect their affordability. It’s advisable to consult with a mortgage broker to explore options that best fit individual circumstances, especially given the current market volatility.
July 31, 2026