As we step into March, it’s safe to say February has been a big month for the UK mortgage and housing market. Interest rates are on the move, lending policies are under review, and house prices are starting to steady – big news for anyone working in mortgages, finance, or property. These shifts don’t just affect borrowers and lenders; they’re also shaping hiring trends and career opportunities across the sector.
In this month’s newsletter, we’re breaking down the latest market changes and what they mean for professionals in mortgages, housing finance, and property investment. Whether you’re hiring, job-hunting, or just keeping an eye on industry trends, here’s what you need to know.
Mortgage Rates & Lending Trends
Mortgage rates have been a hot topic this February, with several big lenders slashing rates to draw in borrowers. HSBC, NatWest, Santander, and Barclays have all rolled out mortgage products with rates dipping below 4% – a big shift from the much higher rates we saw throughout 2024. This suggests lenders are feeling the pressure of competition and adjusting to expectations of a more stable interest rate environment.
Nationwide, TMW, and Virgin Money have also jumped on board, cutting their rates, with some deals now sitting below 4%. Nottingham Building Society has taken things a step further by expanding its affordability criteria, making it easier for borrowers to get financing. Meanwhile, all eyes are on the Bank of England’s next move, with MPC member Swati Dhingra signalling that any base rate cuts will be “gradual.”
What this Means for the Mortgage and Finance sector
These rate cuts suggest lenders are gearing up for a busier mortgage market in 2025. With competition heating up, we could see a growing demand for mortgage advisers, underwriters, and affordability assessors as lenders work to manage an increasing number of applications. This could also mean a boost in recruitment across the sector, as firms look to take advantage of improved affordability and attract more borrowers.
House Prices & Market Growth
House prices are starting to settle, with Zoopla reporting a 1.9% year-on-year rise in January—an encouraging sign that buyer confidence is making a comeback after a rocky period for the market. Looking ahead, forecasts from West One suggest UK house prices could push past £300,000 in 2025, adding to the growing optimism about market stability and growth.
Mortgage approvals are also on the up, with projections pointing to a 13.4% increase this year. This jump is being driven by improved affordability, lower borrowing costs, and a steady demand for property investment—good news for both buyers and those working in the finance sector.
Impact on Mortgage Professionals and Recruiters
An increase in mortgage approvals usually means more activity in the lending sector, which could drive up demand for mortgage brokers, case managers, and conveyancing professionals. With a higher volume of applications to process, lenders and brokerages will need more skilled professionals to keep up. On top of that, growing demand for housing could open up more opportunities in property finance and lending roles, making this a promising time for recruitment in the sector.
Lender & Market Movements
Several lenders have shifted their strategies in response to market conditions. Metro Bank has reduced its mortgage lending, instead focusing on specialist loans, which could indicate a shift towards higher-margin, niche lending products. At the same time, Skipton Building Society has grown its mortgage balances by 8% to £31bn, demonstrating strong performance in the lending sector.
Hanley Economic Building Society has made enhancements to its Retirement Interest-Only (RIO) mortgage products, a segment that continues to grow. Yorkshire Building Society (YBS) has reported increased mortgage lending, though its profits have seen a decline, reflecting the tighter margins in the current lending landscape.
Lender & Market Movements
Lenders are adjusting their strategies to keep up with shifting market conditions. Metro Bank has scaled back its mortgage lending, shifting its focus to specialist loans—likely a move towards higher-margin, niche lending products. Meanwhile, Skipton Building Society is going in the opposite direction, growing its mortgage balances by 8% to £31bn, showing strong performance in the mainstream lending sector.
Hanley Economic Building Society is also making moves, enhancing its Retirement Interest-Only (RIO) mortgage products as demand for later-life lending continues to rise. Over at Yorkshire Building Society (YBS), mortgage lending has increased, but tighter margins have hit profits, highlighting the competitive pressures many lenders are facing.
What this Means for Recruitment and Hiring in Mortgage Finance
As lenders shift their strategies, we’re likely to see changes in hiring priorities across the sector. Metro Bank’s focus on specialist loans could drive demand for underwriting and risk assessment professionals, while Skipton’s expansion may open up opportunities for mortgage advisers and sales executives. With the RIO mortgage sector gaining traction, there’s also likely to be increased demand for later-life lending specialists, as more lenders look to cater to this growing market.
Regulatory & Policy Updates
The Financial Conduct Authority (FCA) has promised “bold” reforms aimed at cutting red tape and making it easier for people to secure mortgages. This could mean changes to affordability tests and loan eligibility criteria, potentially opening up more opportunities for buyers. Meanwhile, the Land Registry is introducing a new digital verification system designed to speed up property transactions and reduce the admin burden on lenders and brokers.
However, questions remain over the government’s Mortgage Guarantee Scheme, which has been criticised for not doing enough to support first-time buyers. While there’s talk of improvements, it’s still unclear whether the scheme will be revised to better meet the needs of the market.
What this Means for Industry Professionals
Regulatory changes can directly impact how lenders assess affordability and risk, influencing hiring trends in compliance, risk management, and financial planning roles. If mortgage accessibility improves, brokers and advisers may see an increase in first-time buyer activity, creating new business opportunities.
Buy-to-Let & Investment Market
The buy-to-let (BTL) market has faced challenges in recent years, but there are signs of improvement as new regulations come into play. In Manchester, nearly 2,000 rental properties now require safety licenses, reflecting a broader push for increased regulation in the sector. While this adds another layer of compliance for landlords, it also aims to improve standards across the rental market.
On the lending side, the availability of buy-to-let mortgage products has hit a record high, according to Moneyfacts, giving investors more financing options than ever. Paragon Bank has also reported that landlord yields are at their highest level since 2012, suggesting that returns are strengthening for those still active in the market. Despite ongoing regulatory pressures, these factors indicate a more stable and potentially profitable outlook for property investors.
Interest Rates & Inflation – What’s Next?
The Bank of England cut the base interest rate by 25 basis points to 4.5% this month in an effort to boost economic growth and make borrowing more affordable. While this should be good news for borrowers, inflation has thrown a curveball—rising to 3% in January, above the Bank’s 2% target.
This unexpected inflation spike has made lenders more cautious. Santander, for example, has already pulled its 3.99% five-year fixed-rate mortgage, reflecting concerns that inflation could delay further rate cuts or even push lenders to adjust their pricing. How this plays out over the next few months will be crucial for mortgage rates and the wider property market.
What Professionals Should Watch For
The relationship between interest rates and inflation will be key in the months ahead. If inflation stays above target, lenders are likely to remain cautious, which could lead to tighter borrowing conditions and fewer competitive mortgage deals. Mortgage professionals should stay alert to potential shifts in lending appetite, as well as any adjustments to affordability criteria that could impact borrowers. Keeping up with market trends and policy updates will be essential for advising clients and navigating the changing landscape.
Looking Ahead
February’s mortgage market trends suggest we’re entering a period of stabilisation and gradual improvement. With lenders reducing rates, mortgage approvals picking up, and house prices showing signs of steadiness, there’s a sense of cautious optimism for the months ahead.
For those working in mortgage and commercial finance, these shifts could mean more hiring opportunities, particularly in mortgage advice, underwriting, and affordability assessment roles. At the same time, potential regulatory changes may impact lending practices, making it even more important for professionals to stay informed and adaptable.
As specialists in recruitment for the mortgage and financial services industry, we’ll continue to track these developments and provide insights into how they might shape hiring trends. Whether you’re looking for new opportunities in mortgage finance or seeking skilled professionals for your team, we’re here to help. Get in touch to find out how we can support your growth in this evolving market.
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Financial Times: “UK banks risk an outbreak of boardroom exuberance”
https://www.ft.com/content/876e4d80-f21b-4e27-9ba9-68a1f82a0771
The Scottish Sun: “Mortgage rate warning as sub 4% rates could ‘disappear’ due to inflation rise, brokers warn”
https://www.thescottishsun.co.uk/money/14366452/mortgage-rate-warning-due-to-inflation-rise/
Financial Times: “Gap between prices of UK flats and houses ‘widest in 30 years'”
https://www.ft.com/content/377c17e3-af15-4d9e-b2f1-0df7c6210cc7
MPA Magazine: “Mortgage approvals set to rise significantly in 2025”
https://www.mpamag.com/uk/news/general/mortgage-approvals-set-to-rise-significantly-in-2025/526459
FM Industry: “Letters: Later Life Mortgage Lending in the UK”
https://fmindustry.com/2025/02/27/letters-later-life-mortgage-lending-in-the-uk/
Reuters: “UK home prices to rise 3.5% this year, Bank of England to continue cutting Bank Rate – Reuters poll”
https://www.reuters.com/world/uk/uk-home-prices-rise-35-this-year-bank-england-continue-cutting-bank-rate-2025-02-25/
Mortgage Finance Gazette: “Later life lending up 28% on annual basis: UK Finance”
https://www.mortgagefinancegazette.com/lending-news/equity-release/later-life-lending-up-28-on-annual-basis-uk-finance-27-02-2025/
Property Reporter: “Mortgage approvals set to climb by 13.4% in 2025”
https://www.propertyreporter.co.uk/mortgage-approvals-set-to-climb-by-134-in-2025.html
Commercial Trust: “Inflation increases to 3 percent – how is the mortgage market reacting?”
https://www.commercialtrust.co.uk/news/inflation-increase-impacts-mortgage-market/
Mortgage Finance Gazette: “UK house price could breach £300k mark in 2025: West One”
https://www.mortgagefinancegazette.com/market-news/uk-house-price-could-breach-300k-mark-in-2025-west-one-26-02-2025/
Farrell Heyworth: “UK House Price Index January 2025: Key Market Insights and Trends”
https://www.farrellheyworth.co.uk/blog/house-price-index-january-2025/
Ainvest: “Best UK Mortgage Deals of the Week: 20 February 2025”
https://www.ainvest.com/news/uk-mortgage-deals-week-20-february-2025-2502/
ONS Blog: “Keeping average house prices up to date”
https://blog.ons.gov.uk/2025/02/19/keeping-average-house-prices-up-to-date/
EY: “Growth in UK mortgage lending to double this year”
https://www.ey.com/en_uk/newsroom/2025/02/growth-in-uk-mortgage-lending-to-double-over-2025
Morningstar: “UK mortgage lending ‘set for a boost in 2025’ — forecast”
https://www.morningstar.co.uk/uk/news/AN_1739774999648155800/uk-mortgage-lending-set-for-a-boost-in-2025-%E2%80%94-forecast.aspx
PariVest: “UK House Price Index: January 2025”
https://parivest.com/uk-house-price-index-j