Mortgage market update | July 2025

We’re halfway through the year and things haven’t slowed down. Rates are moving again, house prices have dipped slightly, and there’s been a boost for self-employed borrowers. Here’s what’s been happening this month:

Bank of England Holds Base Rate at 4.25%

The Bank of England has held the base rate at 4.25% this month. No surprises here, as inflation is still being watched closely and the Bank is taking a cautious approach.

While this decision doesn’t mean much change for most mortgage deals directly, it’s still one to keep an eye on as we move through the second half of the year.

The next announcement is due on 7th August, when we’ll get another update on whether a rate cut is back on the table.

TSB Improves Lending for Self-Employed Clients

TSB has made some positive changes to how much self-employed clients can borrow.

They’ve increased their maximum loan-to-income (LTI) multiple to up to 5.5 times income for applicants earning over £100,000 with less than 85% LTV. Even those earning between £75,000 and £100,000 may now be able to borrow up to 5 times income, depending on their deposit.

It’s a step in the right direction, especially when some lenders still apply tighter restrictions to self-employed borrowers. If you’re in this group, it could mean access to a bit more borrowing power than you might expect.

House Prices Slip in June

Nationwide reported that house prices fell by 0.8% in June, the biggest monthly drop in two years.

Prices are still up 2.1% compared to this time last year, but once you factor in inflation, they’re actually down in real terms. It’s the latest sign that the market has cooled a little since the busy start to the year.

We’re seeing more price reductions and a bit more choice for buyers. It’s not a dramatic shift, but sellers are being more realistic, and buyers may have a bit more room to negotiate than they did a few months ago.

Rates Have Been Up, Down… and Back Again

I know, I must sound like a broken record, one month I’m talking about rates going up, the next they’re coming down again. And this month? We’ve seen a bit of both.

Some lenders increased rates recently, only to pull them back down days later. Nationwide dropped some of their fixed rates again this week, and others have followed. It’s all happening quietly in the background, but it could make a difference if you’re mid-application or coming up to a remortgage.

The good news? If you're a client, you don’t need to stress about it, we keep an eye on rates daily and can switch you to a better deal if one comes up before you complete.

It’s hard to follow. But that’s what we’re here for.

Risk warnings

Your home may be repossessed if you do not keep up repayments on your mortgage