Top Stories of the Week: Inflation Jump to 3% puts FTB Homes in Face with a Four-time Stamp Mandate in April
Explore these developments and more below. 
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Swaplate Falls Provides “Lights on the Horizon” for Mortgages: Octane Capital
According to Octane Capital, the recent decline in SWAP rates after the Bank of England's base rate was reduced to 4.5% brings hope to home buyers and buyers. The swap rate for five years has fallen, with some lower than 4%, and mortgage rates being eased.
Octane Capital CEO Jonathan Samuels said lenders are increasingly confident and is expected to see improvements in mortgage affordability in the coming months. This positive trend suggests a more optimistic outlook for the real estate market in 2025 compared to last year.
Inflation jumps to 3%, risking further reductions in base rates
UK inflation rose to 3.0% in January, bringing concerns that it would be a 10-month high, pivoting the Bank of England's 2.0% target to a difficult path. Mortgage experts warn that this unexpected increase could slow or reverse recent fixed-rate mortgage cuts.
Some argue that inflationary pressures are due to temporary factors, but others warn that high wage growth and global economic trends will not allow for inflation and immediate interest rate cuts. It's there. Despite market expectations for two interest rate cuts this year, analysts suggest that banks could face difficulties for justifying them if inflation is stubbornly high.
Natwest is reduced at 46bps, and TSB reduces Resi rate by 0.30%
Natwest has reduced mortgage rates for a variety of products by up to 46 basis points. Notable reductions include two-year fixed recoat, which fell from 4.46% to 4.00% on the four-year LTV, and five-year fixed purchases at LTV 60% to 4.26%. Lenders also reduced mortgage interest rates, including helping to purchase the range.
Meanwhile, TSB is making up to 0.30% reductions across residential products, including first-time buyers, home movers and rimmut products. These changes reflect increased lenders' trust and increased mortgage affordability.
The “static” UK economy faces inflationary pressure: Boe Bailey
The UK economy continues to stagnate amidst cost-of-living pressures, rising energy costs and uncertainty in global trade, according to Andrew Bailey, Governor of Bank of England. Inflation is expected to rise to around 2.9% in January, and to 3.7% before easing later this year.
There are also concerns over the possibility of US tariffs on VAT charging countries that could hit the UK economy £24 billion. Despite a GDP growth rate of just 0.1% in the last quarter, Bailey advocates for further speed reductions, balance of inflation risk, and a careful approach to economic vulnerability. The market expects to cut basic rates two or three times this year.
FTB home facing stamp obligations against quadruple piles in April: Skipton
The percentage of UK regions where first-time buyers (FTBs) face stamp duty will be set to quadruple from 8.4% to 32% on April 1st to 425,000 to 32%. Higher levels, according to Skipton Group.
The even more affordable challenges delve into lifetime ISAS (LISA). This is because the £450,000 limit could fall below the average FTB property price in many regions, and could limit access to savings without a penalty.
With nearly 90% of potential FTBs not available locally, Skipton CEO Stuart Haire has maintained the government's current stamp duty threshold, raised LISA restrictions, reduced withdrawal penalties, and Inspires aspiring homeowners to better support.
Santander will subtract 4% rates for five years one week after launch
Due to the rising swap rate, Santander withdraws its five-year fixed mortgage rate at 3.99% just one week after its launch, with the change taking effect at 10pm on February 21st. The 3.99% revision for the two years remains, but borrowers need to act promptly to secure a five-year contract.
Market fluctuations have led to similar movements from other lenders, with cooperative banks temporarily pulling some fixed interest rates. But Barclays, the nation, and Halifax are slowing down and offering some relief. Despite the volatility, experts expect the Bank of England base rates to fall over the year, but the timing remains uncertain.
Wages rise “not unexpected”: Boe Bailey
The Bank of England has adopted a cautious approach to interest rate reductions as wage growth remains high despite slightly below expectations. The 5.9% salary increases still exceed inflation and central bank targets. Then it will be actively reduced.
With inflation rising to 2.9% and expected economic vulnerability in play, economists suggest that the next rate cut is likely in May rather than March. The city expects two more quarter cuts this year, bringing the base rate to 4% by the end of the year.
Lloyds Group profits slide, but the mortgage business is robust
Lloyds Bank Group's pre-tax profit for 2024 fell 20% to £5.97 billion with no forecasts under a £1.2 billion clause for motor finance compensation It was.
Nevertheless, the loan rose £9.4 billion to £4591 billion, leading to £6.1 billion in UK mortgage growth. CEO Charlie Nun pointed out H2's revenue profits. Meanwhile, HSBC has increased its UK mortgages by £3.7 billion and increased its market share to 8.1%.
Mortgage lending growth has more than doubled this year: EY
The UK mortgage lending is expected to grow from 1.5% in 2024 to 3.1% in 2025, due to falling interest rates and rising consumer confidence. Although home prices and mortgage fees remain high, lending growth is expected to stabilize at 3.2% in 2026 and 3.6% in 2027.
UK bank lending is projected to rise to 3.7% in 2025, with a low default rate expected. EY says that while economic recovery strengthens trust, risks such as geopolitical tensions and rising UK taxes could affect future lending growth.
Tenants travel five times in five years for landlord exits
According to Cornerstone taxes, almost 19% of tenants are forced to move five times within five years as landlords are evicted from the market. Many landlords either hand over the high costs of a mortgage or leave because of increased costs. Additionally, 17% of tenants missed real estate due to the bidding war.
David Hannah of Cornerstone is urging the government to encourage landowners, particularly as demand continues to outperform supply. He has criticised recent housing reforms, including disappointing investments and abolishing multiple housing bailouts that cut housing stocks. He urges the government to prioritize landlord affordability and support to ease the housing crisis.
