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We take an overview of the mortgage market, hearing from industry voices and getting a round-up of the best rates courtesy of the independent experts at Moneyfactscompare.co.uk.

Mortgage rates have continued their trickle down this week – a process that’s been under way since the summer as the path towards lower interest rates now seems set (even if the Bank of England appears keen to walk down the path very slowly).

This is how average rates are looking – though it’s important to stress that many borrowers will now be able to get deals much nearer, or even below, the 4% mark…

First-time buyers

There was a significant boost for those looking to get on the housing ladder this week as Nationwide announced it would start lending up to six times someone’s salary.

David Hollingworth, a director at L&C Mortgages, told Money that this could help combat two serious challenges facing these buyers – house prices remaining “extremely resilient” despite some falls over recent years, and building a deposit during a cost of living crisis.

“The need for the longer fix is to give stability of payment and remove the chance of interest rate fluctuation pushing payments up and also enables them to apply more flexible stress rates,” he said.

Mr Hollingworth pointed out that Halifax has also extended its first-time buyer limit to 5.5 times a salary.

“Of course, lenders will still apply their affordability tests,” he said.

There is often a minimum household income expected. For example, Nationwide expects a minimum income of £50,000 or £30,000 in the case of a single applicant. 

Landlords

Moneyfacts finance expert Rachel Springall says those looking for buy-to-let mortgages can be “encouraged” by lenders such asSantander, NatWest and Leeds Building Society lowering rates this week.

This is offset, however, by “concern about a potential hike in capital gains tax in the budget next month”. 

She said: “Landlords have had to review their portfolios over the years due to changing taxation rules and some may plan to buy through a limited company, according to new research.”

One benefit here is paying the lower corporation tax rather than income tax.

Landlords who utilise limited company structures have incorporated an increasing proportion of their portfolios over the past four years, a study has found.

And the research, carried out by Pegasus Insight, suggests 67% of landlords who intend to buy in the next 12 months plan to do so through a limited company. 

Louisa Sedgwick, managing director for mortgages at Paragon Bank (which commissioned the study), said: “Landlords have increasingly used limited companies to mitigate the impact of tax changes phased in from 2016. 

“While incorporation isn’t necessarily the best option in every situation, and landlords should seek advice from a professional financial or tax adviser, this highlights the opportunity for those that place this type of business.”

Moneyfacts has looked at the best rates on offer for landlords now…

Moneyfacts also rounds up what it calls “best buys”, which look beyond the lowest rates and takes in incentives and fees.