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November Market Update
Business News
Economic Outlook
Following the Chancellor’s pre-Budget speech, the government appears focused on reducing inflation and borrowing costs to create more room for growth investment. Markets had already priced in this sentiment, with forward rates trending lower—a positive sign for businesses and property clients.
Interest Rate Forecasts
- Short-Term: Base rate expected to fall by approx. 0.50% to 3.5% over the next 12–18 months.
- Medium-Term: Forecasts for 2–3 years ahead have improved, with rates now expected between 3.25%–3.5%, down 0.25% from previous estimates.
This is encouraging news for clients with tracker mortgages or products linked to the Bank of England base rate, including Invoice Finance, Property Development, and Bridging Facilities.
Property Investment Market Trends
Lenders are adjusting product guides to reflect the improved rate outlook. This benefits development clients looking to retain properties for investment, as lower costs improve loan serviceability and access to higher Loan-to-Value (LTV) options.
Rate Comparison Snapshot
| Product Type | Rate (Jun ’25) | Rate (Oct ’25) | Movement |
|---|---|---|---|
| BTL – 75% LTV | 5.64% | 5.20% | ↓ 0.44% + £299 saving |
| Small HMO/MUFB – 75% | 5.99% | 5.00% | ↓ 0.60% – Valuation cost saving |
| Large HMO/MUFB – 75% | 5.65% | 5.45% | ↓ 0.20% |
5-Year Cost of Funds: Now at 3.57% (Oct ’25), supporting investment loan margins of 1.60%–2.00%.
