Hello again, my wonderful mortgage heroes, lender legends and BDM warriors.
I feel a bit like the housing market at the moment: cautiously optimistic, a little confused and waiting for someone sane to tell me what happens next.
Anyone who has ever driven a long way with children in the back knows the question that defines the trip: are we close? The mortgage market has been asking the Bank of England for the better part of two years, and the answer remains the same: not yet; recalculation route.
What has changed is who will drive. Whether eyelashes on a black T-shirt will be the change everyone needs or wants remains to be seen.
Burnham Bounce was able to see an episode of good feeling
However, he seems to represent the cool kid at the Rydell High car race. Whether he appears as Craterface or Danny, time will tell. (For those of you who don’t get this clue, watch the movie Grease — I’ve seen it 11 times.)
So far, we have been very short on policy details from PM-in-waiting Andy Burnham, which is really worrying; except that he seems to want to go further north and move loads of energy from Westminster to local areas that should know better what they need. It’s an interesting strategy.
Housing seems to be high on his agenda, in the form of intervention and further transfer of housing policy. Also, there is a clear intention to look at tax changes, possibly replacing stamp duty and council tax with an annual property tax, which would help reduce the burden of buying a home but which could affect its affordability.
The key to most of this is who he chooses as chancellor, with Ed Miliband a clear possibility, which worries me a little. There are those who say that Rachel Reeves should continue but be given a clear mandate. Either way, it’s a big decision.
Inflation is sitting quietly at 2.8% for now, but July’s energy cap is the event we all saw coming.
We all know that emotions carry a lot of weight, so the Burnham Bounce, a bit of good weather and England finally brought it home (I know, I know) was able to see a good feeling reminiscent of the early days of Tony Blair. Since the world is so divided, however, it is a big deal.
Meanwhile, and back to the driving metaphor, the Monetary Policy Committee is our nervous coach with a double brake, keeping its foot on the pedal in June, and holding the base rate at 3.75%.
The data to be burned is the 7:2 split, and that the two opponents wanted to retreat, wanting to rise to less than 4%. Go back to the spring, when the only debate was how fast we could go downhill, and you appreciate how much the road has turned.
Inflation is sitting quietly at 2.8% for now, but July’s cap is a speed bump we can all see coming and, along with the lingering effects of the Middle East conflict, could push the figure back to 4% before the year is out.
The Monetary Policy Committee is our shock absorber with a double brake
The latest speculation is that there will be no change in the Bank’s base rate until next year, possibly until the end of 2027, when we could see rates return to a new constant of around 3%. So the markets appear overvalued and there is room for swaps to fall and loan rates to follow suit.
What about our favorite currency markets? Since the last time, three-month-old Sonia stood strong as the goalkeeper of Cape Verde, unchanged at 3.75%, and the exchange has passed in the defensi as four players of France.
The 2-year yield was down 0.13% at 3.94%
The 3-year yield was down 0.12% at 3.94%
The 5-year bond was down 0.12% at 3.99%
The 10-year yield was down 0.12% at 4.24%
Elsewhere, the property market is stuck on the streets, with nationally reported prices falling 0.6% in May, and Rightmove posting June’s biggest drop in asking prices in 14 years. Three out of five homes are still on the market unsold after six months. That’s a lot of signs for sale that collect rust.
But look for the cars, not the potholes. Mortgage approvals ended last year and lending is very busy from October 2022. A soft market with enthusiastic sellers and improving accessibility is the clear asphalt measure that the first-time buyer is waiting for, and it is our job to identify it and explain that the route is open.
Digital authentication, smart location data and the transformation of outdated processes can really move the dial
Lenders have noticed the gap and it looks like they are about to close it. June saw a flurry of passes, lenders cut back and the ‘summer sale’ began. After the white-knuckle revolution of the spring, are we about to see the promised war of proportions?
Elsewhere, Gen H and Atom are raising 95% for borrowers, Hodge Bank has removed LTI caps for borrowers earning £40,000 or more on all their residential products, and Nottingham BS is the latest lender to reduce stress levels in response to softening expectations of future interest rates.
Santander has improved its overseas lending policy, increasing the maximum LTV on all properties, including new builds, to 90% for eligible applicants who do not have permanent UK abode.
Meanwhile, Paragon Bank is offering homeowners £1,000 cashback on 21 buy-to-let mortgages offered over five years on a five-year fixed-rate product.
Finally, there’s a new road structure ahead, too. The FCA’s CP26/18, ‘Supporting first-time and underserved consumers’, suggests a more flexible approach to fair lending. This does not disable the navigator; it makes them important. The more open the borrower is, the more the borrower needs someone in the passenger seat who can read a map.
Three out of five homes are still on the market unsold after six months
In all the excitement around technology, AI, the digital journey and quick decisions, one theme always emerges: advice is important. I would argue that it is more important now than it has been for years.
Across the industry we’ve seen renewed debates about mortgage rule changes, faster customer journeys and technology-led lending. At the same time, we saw reminders that mortgages are always a deeply personal decision. Advice is not an argument. Advice is protection. Advice is the essence. The advice is to understand why someone wants to move, not just whether they can.
A world of complex income tax returns, gifted deposits, family support, affordability changes, professional lending options, foreign country terms and new products doesn’t diminish the need for advice. It increases.
Finally, well done to Maria Harris and all involved in OPDA, bringing industry and government stakeholders together to reduce friction and improve the home buying experience. Digital authentication, smart location data and the transformation of outdated processes can really move the dial.
Housing appears to be high on Burnham’s agenda, in the form of intervention and further transfer of housing policy.
In short: a new driver, the same terrain and a road that exudes a firm hand over a heavy foot.
It’s been a long journey and they still have a long way to go. But, while politicians argue over the radio station and headlines scream in the back seat, retailers will continue to do the one thing that matters in this business: bringing people home.
The hero goes to Zero
Maria Harris – a champion of the industry, pushing everyone involved in the transformation of real estate and the digitalization of commerce.
I The new Mortgage Industry Mental Health Charter survey — please try to complete it
Lenders continue to innovate rather than simply competing on price
Economists of communication who predicted six different outcomes and claimed victory regardless
A persistent lack of confidence run by a different community that has been raped those who are interested in separatist politics
You Know What Really Makes Me Smile?
This industry’s ability to adapt is what makes me smile.
Every few years, someone predicts the death of mortgage advice. The internet would do it, comparison sites would do it, direct lending would do it, only execution would do it, and AI is obviously next in line.
Yet we are all here.
He’s still answering busy phone calls, calming nervous shoppers, finding solutions when others see problems, and helping people navigate one of the biggest financial decisions of their lives.
Technology will make us completely better, AI will make us more efficient, and faster travel will improve customer outcomes altogether. But none of them take the place of empathy — or, more importantly, trust.
And none of them changed the reassuring words, ‘Leave it to me. I’ll fix it.’
Now get out there and smash the second half of the year.
I really hope you do.
Andrew Montlake is a director at Coreco
This article appeared in the July/August 2026 issue of Mortgage Strategy.
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