This week's Top 10 Stories in Mortgage Strategies
This week we look at Lloyds Bank's interest rate forecast and the Chancellor's potential plans to raise capital gains tax on share sales. Stay tuned for more details below. 
Interest rates will never approach zero again: Lloyds
Lloyds Bank chief executive Charlie Nunn predicts the days of ultra-low interest rates are over. Mortgage rates are expected to fall from their current highs, but are unlikely to return to the near-zero levels seen in the 2010s. This view is supported by experts at the Mortgage Business Expo, who believe 3.5% is the 'new normal', even if the Bank of England cuts the benchmark rate further. Despite higher borrowing costs, Mr Nunn highlights that savings are rising, loans are less difficult and financial security is greater for most Brits.
Reeves considers raising CGT rates by selling shares rather than second home: Report
Finance Minister Rachel Reeves plans to increase capital gains tax (CGT) on share sales from 20% to 24% in the next budget, according to reports. The move is aimed at matching the rate of property sales and bringing additional revenue to the government. Previous proposals for a significant increase in CGT were rejected due to concerns about the potential negative impact on investment and limited revenue growth. Experts are divided on whether this change will be effective in increasing the Treasury's resources.
TSB launches 1-year fixed product transfer coverage
TSB launches new 5.95% one-year fixed rate mortgage for residential and rental customers. While this provides short-term certainty in a volatile market, the borrower risks higher payments once the lock-in period ends. TSB will also increase some five-year amendment fees and relaunch two-year tracker products with more flexible terms. Experts have suggested that one-year fixes could become more common as borrowers seek flexibility amid interest rate uncertainty.
NatWest increases new contract interest rate and additional borrowing rate by 0.30%
NatWest will increase mortgage rates by up to 0.30% across new business and additional borrowing products. This includes raising purchase and mortgage rates to two-year and five-year fixed rates, as well as purchasing first-time, help-to-buy and transfer products. The changes will come into effect on October 16 and reflect a broader trend of rising mortgage rates in the UK.
Santander makes multiple changes to fixed rates
Santander is making a series of adjustments to its fixed rate mortgages. Fixed interest rates on some home loans and large loans will be reduced by up to 0.13% and 0.10%, respectively. However, fixed interest rates for selected residential, new construction, green, buy-sell, and green buy-sells will increase by up to 0.22%. Product transfer rates were also affected, with some home interest rates increasing by up to 0.12% and some home purchase and sale rates increasing by 0.03%.
Industry calls for stamp duty reform in budget to boost housing market
A group of lenders and mortgage brokers is calling on Chancellor of the Exchequer Rachel Reeves to reform stamp duty in the next budget. They are proposing a stamp duty refund for homebuyers who make energy efficiency upgrades to achieve an EPC rating of C or above. The move aims to encourage greener homes, boost the housing market and contribute to the UK's net zero target. Currently, 60% of UK homes have a below-desired EPC rating.
Inflation outlook: prices more likely to remain 'on track' for rate cuts
Inflation is expected to fall to 2.1% in September, paving the way for the Bank of England to cut its benchmark rate again in November. Lower fuel prices and cautious consumer spending are helping to ease inflation, but rising rents and a possible budget announcement pose risks. The central bank remains cautious about wage growth, but could cut rates further if inflation continues to fall.
Starmer launches brownfield construction program
Chancellor Keir Starmer has launched a £68m brownfield development fund to support the construction of 5,200 new homes across 54 local authorities. The initiative is part of the government's aim to build 1.5 million homes over the next five years, prioritizing brownfield sites while remaining open to greenbelt development where appropriate. Experts have highlighted the need for a comprehensive housing strategy to tackle the UK's severe housing shortage.
Skipton 100% Proven FTB Home Loan
Skipton Building Society is launching a new 100% LTV 'track record' mortgage aimed at first-time buyers struggling to save a down payment. Available from October 16, this five-year fixed rate mortgage has an interest rate of 5.44%, £1,000 cashback and no fees. This product aims to remove the barrier of high security deposits and help people trapped in rental bicycles achieve home ownership.
Inflation falls to 1.7%, lowest in three years: ONS
UK inflation fell to 1.7% in September, the lowest level in three years and below the Bank of England's 2% target. Lower transportation costs, particularly airfares and motor fuel, contributed to the decline. This raises the possibility that the benchmark interest rate will be cut in November, but experts warn that mortgage rates may not follow immediately. The focus now turns to the next Budget and the Bank of England's November meeting for further clues about the future direction of interest rates.
