Market Update & Best Buy Tables – 23rd May 2025

UK Mortgage Rates & Investment Market Update – May 2025

As we approach the end of May 2025, the UK financial landscape is experiencing notable shifts in mortgage rates and investment markets. Here’s a comprehensive overview to keep you informed.

Mortgage Rates: Gradual Decline Amid Economic Adjustments

The Bank of England has reduced its base interest rate to 4.25%, marking the fourth consecutive cut since August 2024. This downward trend aims to support economic growth and manage inflationary pressures. 

• Tracker Mortgages: Approximately 590,000 homeowners on tracker mortgages will see immediate benefits, with average monthly savings of nearly £29.
• Fixed-Rate Mortgages: While fixed-rate deals don’t adjust automatically, lenders have started to offer more competitive rates in anticipation of further base rate cuts. Some two-year fixed deals are now below 4%, with expectations of rates potentially reaching around 3.5% later this year however in the after-math of rates dropping around the base-rate cut we have seen some lenders marginally increase rates back up
• Market Outlook: Despite the base rate cuts, higher-than-expected inflation data for April has led markets to scale back expectations for further cuts in 2025.

Savings Rates: Adjustments Following Base Rate Cuts

In response to the Bank of England’s rate reductions, several financial institutions have announced changes to their savings account interest rates:

• Skipton Building Society: Set to lower interest rates on 92 savings accounts by 0.25 percentage points, effective June 9, 2025. 
• Leeds Building Society: Announced plans to reduce interest rates on 58 savings accounts starting in late June 2025. 
• Monzo: Will reduce rates on its Personal Instant Access Savings Pots from May 27, 2025. 

Savers are encouraged to review their accounts and consider alternative providers to ensure competitive returns, especially in the current low-interest environment.

Investment Market: Resilience Amid Global Challenges

The UK investment market has shown resilience, with equities performing well despite global economic uncertainties:

• UK Equities: The FTSE 100 reached a record closing value of 8,871.31 on March 3, 2025.
• Economic Growth: The UK economy expanded by 0.7% in the first quarter, surpassing the Bank of England’s forecast of 0.1%. Growth was driven by the services sector and manufacturing, particularly among exporters to the US. 
• Private Equity Activity: Private equity interest in undervalued British companies has continued into 2025, with 19 deals worth a total of £2.9 billion announced early in the year. 
• Policy Initiatives: The UK government is promoting investment in domestic equities through initiatives like the Mansion House Accord, encouraging pension funds to allocate a portion of their assets to UK investments.

Looking Ahead

As the UK navigates through economic adjustments, both mortgage holders and investors should stay informed and consider their financial strategies accordingly. With potential for further base rate cuts and ongoing policy initiatives to stimulate investment, opportunities may arise for those prepared to act.

Mortgage Best Buy Tables

First Time Buyers Fixed Rates

Remortgage Fixed Rates

Buy to Let Purchase Rates

PRODUCTS CORRECT AS OF 23.05.25

ALL MORTGAGE RATES ARE SUBJECT TO CREDIT STATUS, INCOME AND AFFORDABILITY.
ARRANGEMENT FEES AND EARLY REPAYMENT CHARGES MAY APPLY TO THESE PRODUCTS THESR ARE FOR ILLUSTRATIVE PURPOSES OF RATES. PLEASE CONTACT AN ADVISER FOR A RECOMMENDATION TO MEET YOUR CIRCUMSTANCES. ALL VIEWS IN MARKET COMMENTARY ARE THE PERSONAL OPINIONS OF THE AUTHOR.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE