As the autumn leaves start to fall, there’s plenty going on in the mortgage world — from interest rate changes to talk of stamp duty reform.
Here’s your update on what’s happening in the mortgage market this month and what it could mean for you.
Stamp Duty Rumours: What’s Actually Happening?
There’s been a lot of noise recently about possible changes to stamp duty — with some reports suggesting the government might reduce it, reform it, or even scrap it altogether.
But here’s the key takeaway: nothing has been confirmed yet.
While it’s natural to wonder if it’s worth holding off on a purchase to “see what happens,” any potential changes may take time — and there’s no guarantee they’ll benefit your specific situation.
Our advice? If you're ready to move, don’t delay your plans based on what might happen. As soon as any official announcements are made, we’ll break them down for you - until then, it's very much hear-say!
Mortgage Rates Are Creeping Back Up
After a period of falling or steady rates earlier in the year, we’ve started to see some lenders increase their mortgage rates over the past few weeks.
Here’s why:
- While the Bank of England base rate is still at 4.00%,
- Swap rates (which lenders use to price fixed-rate mortgages) have risen,
- …largely due to inflation staying higher than expected.
As a result, some fixed-rate mortgage deals are now slightly more expensive than they were last month.
What this means for you:
- If you’re coming to the end of a fixed deal within the next 6 months, now is a good time for us to begin looking at your options.
- Many lenders allow you to secure a new rate early and still switch to a better one later if things improve. We will always monitor your rate from submission to completion to ensure that you always complete on the lenders lowest cost option.
What’s Happening in the Housing Market?
The combination of rising rates and stamp duty speculation has led to a bit of a slowdown in the property market.
Some buyers are waiting to see what happens with taxes or hoping for better rates. But that approach carries some risks:
- Mortgage rates may continue to rise in the short term.
- Delaying a decision could mean missing out on a good deal or your ideal property.
If you’re serious about buying, it’s worth speaking to us sooner rather than later — we’ll help you weigh up your options and make a decision that suits your personal circumstances.
What Should You Do Right Now?
Here are a few simple steps to stay ahead:
- Check when your mortgage deal ends – if it’s within 6 months, we can start looking now - get in touch with us to start the process!
- Don’t wait for tax changes that may never come (although lets hope they do!!!) – make decisions based on what’s happening today.
- Speak to us for personalised advice – we’ll help you make sense of the market and your choices.
We can take the stress out of the mortgage process — and make sure you feel confident about your next steps.
Inflation, Rates & What’s Next... The UK mortgage market continues to evolve against a backdrop of sticky inflation, cautious rate policy, and lender competition. As we enter September, borrowers face a mixed picture: the Bank of England has shifted direction, but mortgage pricing remains far from straightforward. Economic Signals: Inflation, Wages & Jobs Inflation : CPI remains above target at 3.8% , easing compared with peaks but still higher than the 2% goal. Wages : Growth has slowed but remains elevated at ~5% , keeping pressure on inflation persistence. Unemployment : Now at 4.6% , showing signs of a cooling labour market. This backdrop explains why the Bank of England is easing rates cautiously, while markets temper expectations of rapid cuts. Interest Rates: Where We Stand Base Rate : Reduced in August from 4.25% to 4.00% – the second cut of 2025. September Decision : Markets currently expect the Bank Rate to be held at 4.00% in the September MPC meeting. A rate cut is possible in Q4 2025 — November is often cited — but this depends on inflation trends, notably whether inflation peaks as forecast and then begins to decline. If inflation fails to moderate (e.g. food, energy, wages stay elevated), cuts may be delayed. Global factors : US tariff policies and slower Chinese growth continue to weigh on sentiment, limiting confidence in a faster easing cycle. Why Mortgage Rates Aren’t Falling Quickly As we highlighted in August, fixed-rate mortgages don’t move in lockstep with the base rate. Lenders continue to watch swap markets and broader funding costs: 2-year swaps : Edged down slightly in August (~0.08%), reflecting the rate cut already priced in. 5-year swaps : Largely flat, with limited reaction from markets. Lender pricing : Some banks have trimmed selected products, but reductions remain modest. For example, certain 2-year fixed deals came down by 0.10–0.15%, while others have stayed put. In short, while the base rate is easing, mortgage rates aren’t dropping at the same pace. Borrower Implication - If your deal ends in 2025 Expect higher repayments if you fixed at historic lows. Begin exploring remortgage options early – lenders allow you to lock in a rate months in advance. Remember - we will always monitor rates, even if you have secured an option now. Ask about rate switch policies to capture improvements if pricing falls before completion. If you’re purchasing this autumn Affordability remains stretched. Competition among lenders may create selective opportunities, but pricing changes daily. Longer fixed terms could provide stability if you want to shield against volatility. Contact us today to ensure you have an updated idea of your borrowing potential For landlords & investors Buy-to-let mortgage rates have eased slightly, with some of the most competitive deals seen in three years. However, tax and regulatory changes continue to challenge rental profitability. What to Watch This Month 18 September MPC meeting – markets expect no change, but tone and guidance will be critical. Inflation and wage data – stronger numbers could delay further cuts. Lender competition – we may see sharper product changes if swap rates soften further. How Sarah Grace Mortgages Can Help At Sarah Grace Mortgages, we’re monitoring these shifts daily. We help our clients to: Secure rates early before further changes hit. Track lender repricing to capture improvements where possible. Tailor strategies based on individual circumstances – whether moving, remortgaging, or investing. Final Word September brings a cautiously hopeful outlook. The Bank of England has started to ease up, however with inflation and global uncertainty still around, progress will be steady rather than fast. For clients, planning ahead, acting early, and leaning on the right advice can make all the difference in today’s shifting market.
Bank of England Base Rate Cut to 4.00% – What It Means for Mortgage Borrowers The Bank of England has reduced the base rate from 4.25% to 4.00%—its second cut of 2025. This move signals a gradual shift in monetary policy as inflation continues to ease and the economy shows signs of strain. This decision reflects: Continued softening of inflation (latest CPI at 2.4%) Slowing but elevated wage growth (5.6%) Rising unemployment (now at 4.6%) Ongoing global and domestic economic pressures Markets still anticipate a further cut in November, but the Bank is proceeding cautiously. Why Mortgage Rates Aren’t Falling by 0.25% While a base rate cut often makes headlines, it doesn’t translate directly into lower fixed-rate mortgage deals. Lenders use a more complex set of tools to price their products, and base rate changes are only part of the story. How Lenders Price Mortgage Rates When setting fixed-rate mortgages, lenders primarily look at: 1. SONIA (Sterling Overnight Index Average): SONIA closely tracks the Bank of England base rate and reflects the cost of short-term borrowing. It influences how lenders fund certain mortgage products. 2. Interest Rate Swaps: Swap rates are the key driver of fixed mortgage pricing. These are financial instruments lenders use to hedge risk when offering fixed-rate deals. They reflect market expectations for future interest rates over a set period (e.g. two or five years). An Example: A lender offering a 2-year fixed mortgage wants to protect its margin if interest rates rise. It can enter into a swap that locks in its cost of funds based on current 2-year swap rates. If the 2-year swap rate is 4% and the lender offers a mortgage at 5%, they lock in a 1% margin. As swap rates fluctuate daily in response to inflation data, central bank commentary, and global events, so too do the mortgage rates offered by lenders. Swap Rate Movement – Limited Response Although the Bank of England cut the base rate today: 2-year swap rates fell by approximately 0.08% 5-year swap rates remained flat This muted reaction is due to the market having already priced in this move. Ongoing concerns about inflation and wage growth are also limiting expectations of further aggressive cuts. Lender Reaction – Who’s Moved? Several major lenders have made small changes: Barclays and HSBC have trimmed selected fixed rates by 0.10–0.15% Halifax and Nationwide have released targeted reductions this week Santander and NatWest have been more reserved, with fewer pricing changes so far As we move further into August, more lenders may adjust pricing—especially if competition increases or swap rates ease further. Will Rates Keep Falling? Even with a base rate of 4.00%, we’re unlikely to see a rapid or dramatic drop in mortgage rates. Several reasons for caution remain: Swap rates remain above their pre-October 2024 levels Services and wage inflation are still higher than the Bank would like Global events—such as US tariffs and a slowing Chinese economy—could weigh on market confidence This means we may see modest, selective reductions, but not a return to the ultra-low rates seen in past years. What Borrowers Should Consider If your current deal ends in 2025 or you're planning to buy: Secure a rate now: Lenders are repricing cautiously, and rates can change with little notice. Stay on top of the market: Rates shift daily. Some lenders move weekly, others react to market signals more slowly. Working with a broker ensures you don’t miss opportunities. Ask about rate switches before completion: Many lenders allow you to switch to a lower rate if one becomes available before your mortgage completes. How Sarah Grace Mortgages Can Help We’re currently helping clients to: Lock in competitive rates early Monitor the market for rate improvements Take advantage of early switch opportunities Understand the differences between lender strategies With ongoing market uncertainty, timing and attention to detail are key. We stay on top of the live market so you don’t have to. Final Word The base rate cut to 4.00% marks a further step in the Bank of England’s pivot toward easing, but fixed-rate mortgages remain tethered to swap market behaviour. While pricing is improving slowly, it’s not guaranteed—and volatility continues. Borrowers who act early, understand how rates are priced, and work with an expert broker will be best positioned to secure value in this changing landscape.
Podcast with Dentists Who Invest – Featuring Sarah Grace | CPD Available If you're a self-employed dentist or business owner wondering whether it's possible to get a mortgage with fewer than two years of accounts, you're not alone – and the good news is, you're not without options. Sarah recently joined James Martin on the Dentists Who Invest podcast to explore this very topic. In our discussion, we unpacked the common concerns self-employed professionals face when applying for a mortgage, including: ✅ Whether lenders will consider applicants with only one year of accounts ✅ What documentation you really need ✅ The importance of specialist mortgage advice for self-employed dentists ✅ How timing, planning, and presentation can impact your application If you're early in your self-employment journey or planning to make the switch soon, this episode is packed with practical advice designed to help you get mortgage-ready – without having to wait years to prove your income. 🎧 Listen now : Can I Get a Mortgage with Less Than 2 Years of Accounts? – Podcast Episode 📝 CPD Certificate Available : This episode is eligible for verified CPD, making it a valuable use of your time both personally and professionally.
