Mortgage market update | May 2025

There’s plenty happening in the mortgage world this month, with lenders continuing to make positive changes to support buyers.

From NatWest launching a brand-new family-backed mortgage option to wider affordability improvements and a flurry of rate cuts, there are more opportunities opening up for those looking to buy or re-mortgage. Here’s this month’s update:

NatWest launches family-backed mortgage and improves affordability

More positive news for buyers falling just short of their dream home. NatWest has launched a new Family-Backed Mortgage.

This allows friends or family members to help with the mortgage application (without being named on the property), boosting borrowing power for first-time buyers.

Known as a Joint Borrower Sole Proprietor (JBSP) mortgage, it’s a great new option and adds another major high street lender to the limited list already offering this. We recently helped a client use a similar setup to secure her first home. Showing how powerful this option can be. Read more here.

And it’s not just their product range improving. NatWest, alongside Santander and Halifax, have also taken on board the FCA’s new affordability guidance, meaning many buyers can now borrow a little more based on updated criteria.

If you’re looking to get on the ladder or help someone else do it, now could be a good time to explore your options.

Positive signs for the Property market heading into summer

Nationwide’s latest data shows UK property prices are holding steady, with annual growth sitting at 3.9%.

Northern Ireland led the way with strong gains, while London and the South East saw more modest rises (London up 1.9% year-on-year).Despite the end of the stamp duty holiday, conditions for buyers remain supportive, with rising wages, strong household finances, and the potential for further interest rate cuts later this year.

Nationwide expects market activity to gradually pick up as we move through the summer months.

You can view Nationwide’s full report here.

Lender competition heats up - more sub-4% rates emerging

In the last few weeks, we’ve seen a real flurry of activity, with several major lenders cutting rates across their mortgage ranges.

Barclays, TSB, Nationwide, HSBC and Clydesdale are now offering more products below 4% for borrowers with larger deposits.

For example, HSBC's two-year fix at 60% LTV has dropped to around 3.84%, and TSB has cut first-time buyer rates by up to 0.2%.

It’s important to remember that these sub-4% deals are usually reserved for those with strong deposits (typically 40%). But it’s another positive sign that lender competition is heating up.

Risk warnings

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