Mortgage Rates Continue to Fall as Lenders Compete for Business

The mortgage market is experiencing a period of intense competition, with lenders cutting rates left and right in an effort to attract borrowers. This week, NatWest became the latest major lender to slash its mortgage rates, following in the footsteps of Halifax, HSBC, Barclays, and Coventry Building Society.

The rate cuts are a welcome relief for borrowers, who have been struggling with high mortgage costs in recent months. According to Nationwide, the average price of a UK home was £266,604 in June, with mortgage rates still well above the record lows of 2021.

Despite the recent rate cuts, housing affordability remains a major concern. Robert Gardner, chief economist at Nationwide, noted that mortgage rates are still above the long-run average, and that housing affordability is still stretched. However, he expressed optimism that the situation would improve in the coming months.

The rate cuts are also expected to boost the housing market, which has been sluggish in recent months. Ben Perks, managing director of Orchard Financial Advisers, said that the rate cuts would provide a much-needed confidence boost to borrowers, and that the outlook for the second half of the year was much brighter.

Virgin Money Cuts Rates on Mortgage Products

In other mortgage news, Virgin Money has announced that it will be cutting rates on several of its mortgage products. The lender will be reducing rates on its exclusive purchase deals, core products, and product transfers.

The rate cuts will be effective from 8 pm on Monday, July 1, and will apply to a range of products, including the 85% LTV 5-year Fix and Switch fee-saver deal, which will decrease by 0.10% to 5.44%. The 90% LTV 5-year Fix and Switch fee-saver deal will also decrease by 0.10% to 5.59%.

UK House Prices Still Unaffordable for Many

Despite the recent rate cuts, UK house prices remain unaffordable for many people. According to Nationwide, house prices in the UK are still at historically high levels relative to earnings, making it difficult for many people to get on the property ladder.

The average price of a UK home was £266,604 in June, with prices still 3% below the record high set in summer 2022. However, prices are expected to continue to rise in the coming months, making it even more difficult for people to afford a home.

UK house prices remain unaffordable for many

What Does the Future Hold for the Mortgage Market?

The mortgage market is expected to continue to be competitive in the coming months, with lenders vying for business in a crowded market. However, the outlook for the second half of the year is much brighter, with many experts predicting a boost to the housing market.

As the Bank of England considers its next move on interest rates, borrowers will be watching closely to see how it will affect their mortgage payments. One thing is certain, however - the mortgage market is in for a wild ride in the coming months.

Mortgage rates are expected to continue to fall