UK mortgage market update August 7 2026: rate cuts return as house price growth stalls
Barclays cut rates by up to 50 basis points this week, effective 6 August, leading a wave of selective cuts from Nationwide, NatWest, Coventry and Virgin Money, even as the wider market average barely moved. In the same week, the newly rebranded Lloyds House Price Index showed UK house prices essentially flat in July, with annual growth slowing to just 0.1%, the weakest reading since November 2023.
Here’s what actually happened, and what it means depending on your situation.
This week at a glance
| Barclays cut rates by up to 50 basis points, effective 6 August, across purchase, remortgage and existing customer ranges, with the steepest cuts on its 10-year fixes | |
| Nationwide, NatWest, Coventry and Virgin Money, also made selective cuts this week, while Halifax raised rates on selected home mover and first-time buyer deals | |
| UK house price growth slowed to just 0.1% annually, the weakest since November 2023 (Lloyds House Price Index, formerly Halifax, 7 August) | |
| The wider market average barely moved. The two-year fix stayed flat at 5.63%, while the five-year edged up just 1 basis point to 5.67% | |
| Services and construction activity both improved in July, offering a modestly encouraging economic backdrop even as oil price volatility kept inflation risk alive. | |
| Swap rates eased from their 30-day highs which is what gave several lenders room to cut, though the Bank remains cautious given ongoing Middle East volatility. |
Barclays leads the week’s rate cuts
The clearest headline this week is Barclays’ decision to cut rates by up to 50 basis points across its purchase, remortgage, Green Home and existing customer ranges, effective 6 August.
Barclays rate cuts, effective 6 August
| Product | Was | Now | |
|---|---|---|---|
| 2-year fix, 60% LTV, no fee | 4.83% | → | 4.78% |
| 5-year fix, 60% LTV, £899 fee | 4.67% | → | 4.58% |
| 5-year fix, 90% LTV, £899 fee | 4.95% | → | 4.85% |
| 10-year fix, 60% LTV, £999 fee | 5.62% | → | 5.12% |
| 10-year fix, 80% LTV, £999 fee | 6.03% | → | 5.53% |
| New: "Great Escape" 3-year fix, 60% LTV, no fee | 4.88% |
Barclays also launched a new three-year fixed remortgage, branded “Great Escape,” priced at 4.88% with no product fee, available on loans between £50,000 and £2 million at 60% LTV. Jatin Patel, Barclays’ head of mortgages, made a point worth repeating to anyone waiting on a decision: borrowers don’t always need to hold off while they wait for rates to move, since Barclays and many other lenders let clients secure a new rate up to 90 days before their current deal ends.
How other lenders moved this week
Other lenders this week
| Lender | Change | Direction | Effective |
|---|---|---|---|
| Nationwide | Cut fixed rates by up to 0.19% across FTB, home mover and remortgage ranges. Lowest rate now 4.52% | 4 August | |
| NatWest | Mixed. New-business cuts of up to 0.22%, some additional-borrowing rates rose | 10 August | |
| Coventry for Intermediaries | Cut residential rates by up to 0.15%, buy-to-let by up to 0.08% | This week | |
| Gen H | Cut high-LTV and New Build Boost rates by up to 0.40%, loosened new build affordability rules | This week | |
| Halifax | Raised rates by up to 0.12% on home mover and FTB deals, up to 0.05% on remortgage | This week | |
| Virgin Money | Mixed. Trimmed selected purchase/remortgage rates by up to 0.08%, raised BTL product transfer rates by up to 0.15% | This week | |
| Accord Mortgages | Cut fixed buy-to-let rates by 0.10% at 80% LTV | This week |
A quieter but genuinely useful set of changes for anyone outside standard lending criteria:
Criteria & specialist lending news
- Hinckley & Rugby launched Credit Renew for complex credit borrowers, accepting CCJs, IVAs and debt management plans assessed manually, up to 75% LTV
- Leek Building Society introduced eight criteria enhancements, including wider income recognition for benefits, a higher maximum age at term end, and eligibility for contractors on 6 to 12 month contracts
- United Trust Bank reintroduced 90% LTV second charge lending and cut rates by up to 0.60%
- Keystone cut buy-to-let rates by 0.10%, with standard BTL now starting from 3.39% at 65% LTV
- Gatehouse Bank widened its gifted deposit criteria to include non-family members and eligible overseas donors
- Recognise Bank raised its maximum bridging loan-to-value from 75% to 80%
Why rates are moving despite the base rate hold
The Bank of England held its base rate at 3.75% on 30 July, on a hawkish 6 to 3 vote, with three members backing an immediate rise to 4%. That removed any near-term prospect of a cut and shifted market pricing toward a possible rise rather than a fall.
Yet swap rates, the true driver of fixed mortgage pricing, eased back from their 30-day highs in the days around the decision. As Moneyfacts’ Rachel Springall put it this week, the start of August began with more lenders raising rates than cutting them, but as swaps eased off their highs, a handful of lenders found room to cut selected rates. She was careful to add that the market would need a much bigger scale of cuts to meaningfully bring mortgage costs down, which looks unlikely while tensions in the Middle East continue.
The wider economic picture was modestly encouraging. UK services activity returned to growth in July for the first time since April, and the construction sector’s downturn eased sharply, though it remains in contraction overall. Oil prices stayed volatile on Strait of Hormuz headlines, which is exactly the kind of risk keeping the Bank cautious and lenders wary of cutting too aggressively.
House prices: growth all but stalls
Annual house price growth by region
| Region | Annual change |
|---|---|
| Northern Ireland | +7.4% |
| Scotland | +3.6% |
| North East (England) | +2.8% |
| North West (England) | +2.1% |
| Wales | +1.6% |
| UK average | +0.1% |
| Greater London | -1.3% |
| South East (England) | -2.0% |
Source: Lloyds House Price Index (formerly Halifax), 7 August 2026, year to July 2026.
The average UK house price was £299,253 in July, down £143 on June, with annual growth slowing to just 0.1%, the weakest reading since November 2023. This was the first release under the newly rebranded Lloyds House Price Index, formerly the Halifax index, using the same methodology under a new name.
Lloyds’ Amanda Bryden noted that mortgage rates have edged higher again following recent events in the Middle East, after easing earlier in the summer. Broker Mark Harris of SPF Private Clients offered a more positive read, suggesting the Bank’s decision to hold for a fifth consecutive meeting is creating a sense of calm and stability that’s encouraging both buyers and sellers to transact, even without meaningful price growth.
Average UK mortgage rates this week
Average mortgage rates this week
| Product | 7 Aug 2026 | Change (week) | |
|---|---|---|---|
| Two-year fixed | 5.63% | No change | |
| Three-year fixed | 5.38% | -0.02% | |
| Five-year fixed | 5.67% | +0.01% | |
| Standard Variable Rate | 7.13% | No change | |
| Bank of England base rate | 3.75% | Held 30 Jul |
What’s happening in government and regulation
Commentary this week focused on the new administration’s inherited target of 1.5 million new homes by 2029, which is widely seen across the industry as unachievable at current rates of completion. The New Towns programme has been trimmed from twelve proposed locations to seven, with final decisions due later this summer. Prime Minister Andy Burnham’s early pledges have centred on council housebuilding and ending rough sleeping, backed by an additional £340 million.
On the regulatory side, the FCA’s mortgage rule review consultation, which closed on 28 July, is progressing as expected. The FCA has confirmed it will publish feedback and a policy statement in the second half of 2026, alongside continued work on later-life lending and support for vulnerable consumers. Nothing new landed this specific week, but the direction of travel remains toward more flexibility for underserved borrowers.
What to watch next week
What to watch next week
| Tuesday 19 August, July's inflation figures from the ONS, the next real test of the Bank's inflation path | |
| Thursday 17 September, the next Bank of England base rate decision | |
| Ongoing, swap rates. A sustained fall in two and five-year swaps below roughly 4% would likely trigger broader cuts, while a renewed oil spike above roughly $90 a barrel would argue the other way | |
| Ongoing, Middle East developments and Strait of Hormuz headlines, which have driven most of the volatility in fixed mortgage pricing since the summer |
What this means for you
If your deal is ending in the next three to six months, this week’s advice hasn’t changed: secure a rate now. Most lenders, including Barclays, let you book a new rate up to 90 days before your current deal ends, and if pricing improves before you complete, you can usually switch to the better deal. There’s very little downside to locking in early.
If you’re below 75% loan-to-value, this is where the competition was sharpest this week. Barclays, Nationwide and NatWest all cut their 60% LTV fixes, and the best available deals now sit noticeably below the wider market average, sometimes by close to a full percentage point. Worth checking you’re not settling for less than what’s actually available.
If you’re a first-time buyer, Gen H’s cuts to its high-LTV range and its loosened approach to new build affordability are worth a look, alongside West Brom and first direct, who remain strong options at 90 to 95% LTV.
Frequently asked questions this week
Did mortgage rates go up or down this week?
Both, depending on the lender. Barclays cut rates by up to 50 basis points, and Nationwide, NatWest, Coventry and Virgin Money also made selective cuts. Halifax raised rates on selected home mover and first-time buyer deals over the same period. The wider market average barely moved, with the two-year fix flat at 5.63%.
Why did Barclays cut rates so much this week?
Swap rates, which drive fixed mortgage pricing, eased back from their recent 30-day highs, giving Barclays and several other lenders room to cut. The Bank of England's base rate held at 3.75%, so this move reflects funding costs easing rather than any change from the Bank itself.
Are UK house prices still rising?
Barely. The Lloyds House Price Index (formerly Halifax) showed annual growth of just 0.1% in July, the weakest reading since November 2023, with the average UK house price essentially flat month on month at £299,253.
Can I secure a mortgage rate before my current deal ends?
Yes. Most lenders, including Barclays, let you book a new rate up to 90 days before your existing deal ends. If a better rate becomes available before you complete, you can usually switch to it, which is why locking in early carries little downside.
This article is for information only and does not constitute financial advice. Rates quoted are accurate as at the dates stated and are subject to change or withdrawal without notice. Sources: Bank of England, Office for National Statistics, Moneyfacts, Nationwide, Financial Conduct Authority, and UK mortgage trade press published 27 to 31 July 2026.
Reviewed by Brennan Goodwin, CeMAP-qualified mortgage adviser at Heron Financial. Last updated: 7th August 2026.