Borrowers back in control as big-name lenders slash prices
After years of patchy appetite for property lending, the UK’s big banks are firmly back in the game – and this time they are undercutting each other to win business.
Brokers say a fresh “rate war” across residential, buy-to-let and commercial lending is sharpening pricing, boosting incentives and putting borrowers back in the driving seat, even as wider economic uncertainty lingers.
Big banks rediscover their appetite to lend
After a period in which mainstream lenders “weren't very keen on lending” and focused their attention elsewhere, Ash Ajaz, director at Focus Finance Solutions, says their priorities have shifted decisively back towards growth – particularly in the commercial space.
“Definitely, there's competition, and competition is always good,” he told Mortgage Introducer. “It's good for the client that the banks are competing to lend money and want the client business.”
He points to Barclays, Lloyds, HSBC and NatWest as examples of high‑street names now “competing very well” on price. As the Bank of England base rate has eased back from its 4.5% peak to 3.75%, those lenders have cut their own margins, delivering noticeably lower overall pricing for borrowers.
Ajaz adds that recent product launches and repricing moves from major banks – including new options for first-time buyers and widespread adjustments to fixed-rate ranges – underline how keen lenders are to capture business. Those developments are explored in more detail in separate stories on our website, and together they point to a clear shift back towards growth.
Green discounts and sharper spreads
Ajaz says the combination of a falling base rate and tighter high‑street spreads has made for “a very competitive” market from the client’s perspective.
Some borrowers can stack further savings on top of headline cuts by improving the energy performance of their properties. Many mainstream lenders are now offering rate incentives for assets with EPC ratings of A–C, which he describes as “another great incentive for the client”.
“What we’re seeing is sharper margins, plus extra discounts for greener stock,” he said. “When you put those together, the overall cost of borrowing looks much more attractive than it did not so long ago.”
Bridging joins the pricing battle
Away from the high street, specialist lenders are also sharpening their pencils.
Ajaz notes that bridging volumes jumped in 2025, with around a quarter of purchases using short‑term finance, and says rates that once averaged around 1% a month have fallen to roughly 0.6–0.7% for stronger cases.
That, combined with faster execution – particularly for auction purchases – is giving investors more confidence to transact even amid macro uncertainty.
“For the right project, bridging is no longer seen as prohibitively expensive,” he said. “If anything, the speed and flexibility it offers look more valuable when the market is moving quickly.”
Inflation jitters keep borrowers on their toes
Despite the renewed competition, Ajaz stresses that headline pricing is only part of the story.
The “cat and mouse game” between the Bank of England and inflation means banks can move quickly in either direction, as seen when some lenders reversed recent rate cuts after a surprise uptick in inflation to 3.4%.
For borrowers, that puts a premium on good advice and timing – and on stress‑testing deals for the risk that today’s low rate may not last the whole term.
“Rates can go down, but they can go back up again just as fast,” said Ajaz. “You’ve got to build that into your planning from day one.”
Confidence hinges on further base rate falls
Looking ahead through 2026, Ajaz believes a further fall in the base rate would materially lift confidence and activity.
“We need more activity in the market,” he said, arguing that as rates nudge lower, more would‑be buyers will feel able to stop “sitting on their hands” and re‑enter the market.
For now, he expects lenders to keep adjusting pricing and criteria at the margins, with borrowers continuing to benefit from the extra competition.
“Lenders want to lend again, and they’re showing that in the way they price,” he said. “As long as that continues, the high‑street rate wars are likely to rumble on – and for the moment, at least, borrowers are the clear winners.”
