Mortgage rates move higher as house price growth slows

1. MESSAGE FROM SIMON DURANT BA, CeMAP, CeRER

This week feels a little more unsettled than the last one. A number of lenders have moved fixed mortgage rates higher again, while the latest house price figures show that the property market itself is still fairly subdued.

That can sound a bit contradictory, but it is a good reminder that mortgage pricing and house prices do not always move together. For clients, the most useful thing is not trying to predict the market perfectly. It is understanding what is available now, what fits your budget, and whether it makes sense to act, wait or simply get prepared.

2. MORTGAGE MARKET REVIEW AND CHANGES

Mortgage rates have edged higher again

Nationwide and Virgin Money are among the latest lenders to increase selected mortgage rates. Nationwide's changes took effect from 30 September, with increases across home mover, first-time buyer, remortgage and existing customer products.

For Nationwide first-time buyers, selected two, three and five-year fixed rates increased by between 0.05% and 0.21%. Selected home mover fixed rates increased by between 0.06% and 0.18%, while remortgage increases were between 0.02% and 0.20%.

What this could mean for you

If you are buying or your current mortgage deal ends in the next six months, it is worth checking your position early. That does not mean rushing into a deal. It simply gives you time to understand your options before your current rate expires or before you make an offer on a property.

How Durant & Co can help

We can compare your existing lender with the wider market and look at the overall cost, including rate, fees, incentives and your likely monthly payment.

Source: Mortgage Solutions.

House price growth has slowed

Nationwide's latest house price index shows that UK annual house price growth slowed to 0.8% in September, down from 1.6% in August. Average prices also fell by 0.2% during the month, taking the average UK house price to £274,251.

The figures do not mean property values are falling everywhere. There are still big differences between regions, property types and local markets. What they do suggest is that the market remains fairly quiet rather than racing away from buyers.

What this could mean for you

For buyers, a slower market can sometimes create a little more breathing room when viewing and negotiating. For sellers, getting the asking price right remains important, particularly where buyers have more choice.

If you are planning a move, try not to base the decision on one national house price figure. Your own area, property type and personal affordability matter much more.

Source: Financial Reporter.
Source: Mortgage Solutions.

Mortgage approvals have fallen to their lowest level since 2023

Bank of England figures showed 54,900 mortgages were approved for house purchases in August, the lowest level since December 2023.

At the same time, the average interest rate actually paid on newly drawn mortgages rose from 4.45% in July to 4.60% in August.

What this could mean for you

This is another sign that higher borrowing costs are making some buyers more cautious. It does not mean lenders have stopped lending or that mortgages are suddenly unavailable. Applications are still being approved every day, but affordability and choosing the right lender remain important.

How Durant & Co can help

Before you start viewing seriously, we can work through your likely borrowing range and monthly budget so you know what is realistic before making an offer.

Source: Financial Reporter.

Some borrowers with recent credit blips may have another option

West One has changed part of its specialist residential mortgage range and introduced a new Premier Plus tier for purchase, remortgage and shared ownership applications.

The range is aimed at borrowers who may have had relatively small recent issues on unsecured credit. Depending on the full circumstances, the criteria can allow up to three missed payments during the last 12 months where the accounts are now up to date, along with certain small county court judgments or defaults under £500.

What this could mean for you

A missed payment or small credit issue does not automatically mean there is no mortgage option available. Specialist lenders can assess applications differently from mainstream high street lenders, although rates and costs can be higher and all applications remain subject to affordability and lender criteria.

How Durant & Co can help

If your credit history is not completely straightforward, we can look at the detail rather than assuming the answer will be no. We can also explain whether it is better to apply now or spend a little more time improving your position first.

Source: Financial Reporter.

3. PROTECTION MARKET REVIEW AND CHANGES

Aviva is aiming to speed up some protection applications

Aviva has expanded the use of its AI medical report summarisation tool to individual income protection applications. The technology was already being used across other areas of its individual protection range, including life insurance and critical illness cover.

Where a medical report is needed, the system summarises the information for an underwriter to review. The aim is to help some applications move through the medical assessment stage more quickly.

What this could mean for you

If you need life insurance, critical illness cover or income protection and the insurer asks for medical information, the process can sometimes take longer while reports are obtained and reviewed. Technology that helps underwriters review those reports more efficiently could reduce delays in some cases.

It does not mean automatic acceptance and it does not remove medical underwriting. Your application still depends on your health, circumstances, the insurer's criteria and the policy terms.

How Durant & Co can help

We can explain what information an insurer is likely to need, help you through the application process and compare protection options based on the cover itself, not simply the cheapest monthly premium.

Source: COVER.

4. THANK YOU

Thank you for taking a few minutes to read this week's update. Mortgage and protection markets can change quickly, but that does not mean every headline needs to change your plans.

If anything covered this week relates to a move, remortgage or protection decision you are thinking about, you are very welcome to get in touch and talk it through. There is no pressure, just straightforward help with understanding the options.

The Durant & Co Team