In a bumper edition of our market update, we get to talk about the hugely positive events of Heron becoming a B Corp firm, the Bank of England cutting rates, Mortgage product availability increasing and costs decreasing. So for once, without unnecessary waffle, let’s get into it:

Market Update

Heron Financial Has Become A Trailblazing B Corp Certified Firm!

We are very proud to announce that Heron Financial was officially certified as a B Corp Company last week! That means we have joined an elite club of forward thinking firms that do not just focus on profit, but on sustainability and playing a positive role in society. You can read more about this on our B Corp page or have a listen to our Podcast on the subject. While this is a truly whole team effort, a special mention has to go to our Operations Director Emma Migliorini who has been laser focused on ensuring we got over the line. Thank you Emma.

A specific point to note is our active Resilient Homes project, which one the practical implications of this achievement. We offer our clients access to retrofit service to boost the energy efficiency of your home. We will speak to all clients about this in due course, but if you feel this is of benefit, please do not hesitate to get in contact. No doubt there will be more evolutions ahead on our B Corp journey, which we will keep you posted on, but if you feel there is an area we can work with you on, we are open to suggestions on what that could look like, so please do speak to us about an ideas in this area.

Bank of England Cut Rates to 4.5%

More positive news came last month in that the Bank of England cut its benchmark lending rate to 4.5% down from 4.75%. What is also of interest was the voting. All of the MPC (Monetary Policy Committee) voted to cut rates, but 2 voted to cut by a larger amount of 0.5%. This is a very clear indication of direction of travel the Bank of England want to take on rates. Unsurprisingly, we did a Podcast about all this to talk over in more detail.

As ever, this should all be taken with a pinch of salt. Since the BoE announcement, the latest set of inflation figures showed a rise to 3%, which was above the expectation of 2.8%. The age old relationship with Interest Rates and Inflation is that when inflation rises, you should also raise rates to quell demand and vice versa. Currently no-one is expecting any rate rises any time soon, so it is all about the speed at which the Bank of England can cut rates. This slightly above expectation rise means the BoE are likely to hold rates in their next meeting on 20th March but 2 further cuts (meaning a 0.5% reduction on the Base Rate) are still expected and priced in for the rest of the year. The reason why the BoE can keep cutting rates is that wages are growing faster than inflation, at 5.9% on the last read from the Office for National Statistics, meaning ‘real’ wage growth of 2.5% so far in 2025 adjusting for inflation.

This indeed is quite a puzzle for the BoE to solve. We have a relatively flat economy, rising inflation, rising wages and the spectre of a big hike in NI for employers coming in from April. Very difficult to see how that will all shake out, but the commonly held view, which I also subscribe to, is that rates need to keep coming down in the UK to help with all of the cost of living challenges, which will help bolster the economy. All of which we will keep a very close eye on and advise accordingly as this has a direct impact on mortgage product pricing.

Greatest choice of low deposit mortgages since 2020 and Buy To Let Products at ‘all time high’: Moneyfacts

Moneyfacts, the data collection service, has been busy pumping out some interesting stats in the last few weeks. Specifically the low deposit market (which is the typical entry point for First Time Buyers) and for Landlords. These are typically the sectors hardest hit in any downturn, so this uptick in product availability shows a very positive sign for the market as more clients will be able to access the funding they need. 

The availability of deals at the 95% loan-to-value tier rose to 388, now at its highest point in almost five years since March 2020. Product choice overall fell month-on-month, to 6,451 options, however product numbers are substantially higher than a year ago (5,787).

In the Buy To Let sector, the latest analysis shows that overall BTL fixed and variable product availability increased to 3,560 deals. This is the highest count on Moneyfacts’ electronic records since it started in November 2011.

There has also been a month-on-month rise of 92 five-year fixed deals and an increase of 114 two-year fixed deals. Average fixed rates over two or five year fixed terms overall rose month-on-month while the average two-year fixed rate is lower year-on-year.

Money Market & Mortgage Rates