It feels right to start this month’s article with reference to the Budget, even if it was something of a damp squib when it came to all things residential property, stamp duty, a Help to Buy replacement, etc. You name it, it didn’t appear anywhere near the Red Box this time.
Instead, it’s almost impossible not to feel that all the market speculation and policy kite-flying did a whole heap of damage, rather than anything else. I tend to focus on the first-time buyer market, because they are the borrower demographic most likely to be needing and taking out, high LTV mortgages.
But, this was a non-Budget for all borrowers, and certainly those who might have spent the last couple of months thinking they were about to receive something of a stamp duty ‘windfall’, are now going to be left disappointed by what, or rather what wasn’t, included in Rachel Reeves’ announcement.
No changes at all, despite various rumours being put into the press from the Government about abolition, changing the tax to those who sell rather than buy, only issuing the tax on homes over £500,000, etc.
Plus, there was a lot of media noise about the big banks and building societies meeting with the Chancellor in the Autumn in order to specifically discuss first-time buyer activity, and again nothing materialised at the end of November.
As mentioned, the market stasis this delivered was completely unwarranted, when we could have had a full two-plus months of decent transaction and business levels. HMRC data has already shown that the number of homes sold in October this year was down on the same month last year, and I suspect the same will be said of December.
If there’s one thing we should all want for Budget 2026 it’s that the Government keeps its powder dry when it comes to any housing/property-related changes it is even considering. The impact of rumour and speculation is huge and simply unnecessary if the policies thrown out never actually come to fruition.
One positive in the post-Budget environment is that we now have certainty. And given that, I would expect the pent-up demand that has been around over the last few months to start to feed into activity. Certainly, these are the stamp duty levels we will have for the foreseeable future, and therefore first-time buyers might well begin to think now is the time to act, given there is nothing else to wait for, except perhaps some future, unknowable rate changes.
What we might also now see is further action from lenders who have also been keeping their powder dry in recent months. Certainly, that feels like the case in the high LTV space. Each month I look at product numbers and rates, and at the start of December, there is very little change from this time last month.
This month – based on the Nationwide’s monthly average house price of £272,998, which would mean a 5% deposit of £13,650 – we have 254 95% LTV products, just down slightly from 255 last month. The split is between 235 fixes and 19 trackers/discounts/variables, again very similar to last month. In the 100% LTV space we have the same number of products available, 10, as per November.
There is however slightly better news in terms of rates. For two-year fixed-rates, Lloyds remains top but this time with a 4.53% rate, compared to 4.71% last month. Again, just available to current account holders only however this is now two months’ running where we have seen the price on this product come down. Halifax – part of LBG of course – have a 4.63% deal, compared to a 4.68% from the Yorkshire BS.
Lloyds also tops the five-year fixed rate table with a 4.64% deal for current account holders only, while TSB offer 4.69% and Leeds Building Society 4.7%.
As last month, the mutual sector continues to dominate the sector when it comes to 95% LTV trackers, discounts or variables. Scottish Building Society remains at the top with its 4.74% two-year discount, followed by Furness with a 4.84% product in the same space, while Bath also offer a two-year discount at 4.89%. All the same as in November.
For those seeking a 100% mortgage, Lloyds has its three-year fix at 4.44% - again only for current account holders – while the two same lenders again make up the top three with Bath Building Society’s two-year discount at 5.09% and Beverley Building Society’s three-year discount at 5.14% both still available.
Overall, therefore, not a huge amount of change, but we should point out that mortgage applications/volume will now determine what the start of 2026 looks like for lenders, and therefore I wouldn’t be surprised to see some keener rates as December progresses.
I am of course writing this before the 18th December MPC meeting, where we may get an end of year BBR cut, after which we can expect product rates to move lower. In respect of the overall market, December might be a little more active rate-wise as a result and we should certainly hope that we see many more transactions in the months after the Budget than we saw in the months preceding it.
