Summer’s arrival is unlikely to stem market volatility

As I write this it’s ‘officially’ the first day of summer, however the climate clearly had the wrong week in its diary, given the heatwave we’ve just all enjoyed/endured – depending on how you approach these things.

What are we to make of the first throes of our summer months in the context of the UK housing and mortgage market? Traditionally the summer - ironically - sees something of a ‘cooldown’ in terms of activity because, for example, those who might want to move into new homes before the start of the next school year will have already be well through the process or be very optimistic about being able to complete in less than three months. 

That being the case, 2026 has not felt like any sort of ‘traditional’ year in all manner of aspects, not least the mortgage market where the most used word to describe it, since March, has undoubtedly been ‘volatile’.

However, in recent weeks, it’s felt that the volatility has calmed a little, although again - as I write this - the US and Iran appear to have resumed hostilities again. This, despite the news that Donald Trump was actually seeking to agree a peace plan just a few days ago. Go figure on that one.

It’s difficult to place these kind of geopolitical actions to one side, given - as we know - the impact they have on our economy, inflation, and indeed rates, but if we are (hopefully) to believe this is just a further minor storm before the calm, then there are a few reasons to be more optimistic about rates continuing to inch down in the weeks ahead.

That matters because, as we know, demand tends to be driven higher by lower mortgage costs, and of course lower rates make the affordability hurdle that much easier to get over. Clearly, rates are not shifting significantly but, again this very morning, I read of a number of larger, mainstream lenders who have cut rates today and more are likely to follow.

For prospective first-time buyers rates clearly matter and if we are looking at a period where pricing can continue to move down, this might help more of the demographic to begin their moves onto the housing ladder.

In that sense, the start of summer may well bring with it some more positive news, for those starting off on their home-owning journey, who have just a smaller deposit saved in order to do this.

As always, each month I review the number of 95% LTV mortgage products available to first-timers based on the new Nationwide average annual house price. This month that figure is down slightly to £278,024, which would require a 5% deposit of just over £13.9k in order to secure a 95% LTV mortgage. Interestingly, that’s a monthly fall for house prices and just a 1.7% annual increase, so first-time buyers may well have a more affordable property market to access right now than for some time.

There is further good news in terms of 95% LTV product choice which, over the course of the last month, has improved again from 238 up to 246. This is split between 225 fixes (up 11 from May) and 21 trackers/discounts which actually saw a dip from 24 to 21.

Another positive comes in the form of pricing which has also continued to come down over the last month. Skipton now offers the best two-year fixed-rate at 5.22% - last month the best was 5.27% - with Bank of Ireland offering a 5.24% deal and West Bromwich BS offering a 5.25% product. The same trend is visible for five-year fixes. Bank of Ireland now offer a 5.22% deal, followed by the Skipton at 5.24% and Lloyds’ Current Account customer-only 5.26% - last month this was the best buy at a slightly higher 5.27%. 

In the discount/tracker space, last month’s best buy deal - Bath’s 4.74% two-year discount – is no longer featuring, and therefore we have Skipton’s 4.83% two-year tracker, Scottish Building Society’s 4.84% two-year discount, and Nationwide’s 4.89% two-year discount. It will be interest to see if these types of products grow in popularity if the MPC decides to hold Bank Base Rate again later this month. 

We have some further positive news in the 100% LTV space where we have moved up from nine products to 12, across seven (not six) lenders. The three best buys are exactly the same as last month though: Bath Building Society is still offering its two-year discount product at 4.94%, while Beverley still offers a 4.99% three-year discount, and Lloyds has its three-year fix at 5%, again for current account only customers.

Overall then a fairly positive way to start the month, however as always we must counsel caution at almost every step. In the time I have been writing this piece, Iran has threatened to close the Strait of Hormuz again, so who knows where we might be in a month? Let’s hope that a peace plan can be agreed and we can return to some sort of normality with an accompanying focus on keeping inflation down and, hopefully, falling product rates once again.