Coventry undercuts biggest lenders with sub 3.7% rate as mortgage approvals and house prices rise
The scale of mortgage rate changes has started to pick up again over the last few days, with many lenders sharpening their fixed rates.
Coventry Building Society has undercut the biggest mortgage lenders by improving some rates by over 0.5%. It has just launched the lowest two-year fix at just below 3.90%, the most competitively priced three-year fix at just below 3.8% and a five-year fix at just below 3.7%.
Coventry's rates are available for borrowers purchasing a property, provided they have a 35% deposit and £999 arrangement fees. The remortgage rates are higher.
Virgin Money has also launched a sub-5% fixed rate for borrowers with a 5% deposit. It does not have an arrangement fee.
Mortgage approvals up
Figures from the Bank of England show individuals borrowed £2.9 billion of mortgage debt in August, compared to £2.8 billion in July. Net mortgage approvals for house purchases rose from 62,500 in July to 64,900 in August, the highest level since August 2022 (72,000). Similarly, approvals for remortgaging increased from 25,200 to 27,200 over the same period.
Individual net consumer credit borrowing amounted to £1.3 billion in August, a slight increase from £1.2 billion in July.
According to Nationwide, UK house prices rose by 3.2% in September compared with a year ago—the fastest rate for nearly two years. Nationwide's most recent data by property type shows that terraced houses have seen the biggest percentage rise in prices over the last 12 months, with average prices up 3.5%. Semi-detached and flats saw increases of 2.8% and 2.7%, respectively. Detached houses saw a more modest growth of 1.7%.
Commenting on the figures, Nationwide's Chief Economist Robert Gardner said: “UK house prices increased by 0.7% in September, after taking account of seasonal effects. This resulted in the annual rate of growth rising from 2.4% in August to 3.2% in September, the fastest pace since November 2022 (4.4%). Average prices are now around 2% below the all-time highs in summer 2022.
“Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historical standards.”
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The information contained within was correct at the time of publication but is subject to change.
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