Ask the Expert: Mortgage Market Trends and Developments in 2026

The UK housing market continues to present exciting opportunities for buyers, with improving mortgage accessibility, growing lender flexibility, and encouraging signs for interest rates and affordability. To help prospective buyers understand what this means in practice, we spoke to Karl Limb, National New Build Account Manager at Evolve Financial Solutions, Erris Homes’ specialist mortgage partner, to get his expert view on the current market and what buyers should be thinking about.

Is it preferable to buy or rent in the current market?

Karl:
“Since 2021 we have seen monthly rent increases surpass that of house prices in the same period. Nationwide, in a recent report, had house price increases of around 1% since 2021, whereas Zoopla have seen increases of up to 27% in rent.

There is always the added benefit of making your own equity when owning your own home, as you benefit from repaying your mortgage plus any increases in house prices – the profits are yours. In rental, you are paying off your landlord’s mortgage and they are benefiting from it!”

How easy is it to get a mortgage in the current market?

Karl:
“We have seen lenders relaxing their criteria and affordability rules, making it much easier to achieve a mortgage now than at the height of Covid a few years ago. Some lenders will potentially lend up to 7x your household income.

We also have a mortgage product available that allows for a zero deposit – it is a 100% mortgage. Every lender sets criteria and affordability thresholds that need to be met, so it is always best to speak with a New Build Mortgage Expert to get advice tailored to your individual circumstances and needs.

Many lenders have also been changing their criteria for those on visas, making mortgages more accessible for people who have been in the UK for a short period of time.”

What kind of deposit will I need?

Karl:
“As I mentioned, there are a couple of lenders who do not require a deposit. As you increase your deposit, more lenders will become available, as a bigger deposit reduces the risk for the mortgage provider and allows for more relaxed rules on credit scoring.

A 5% deposit is now very common. Please keep in mind you will also need to save for legal fees, stamp duty, and removal costs.”

Should I look for a fixed or variable mortgage?

Karl:
“Fixed mortgage products provide stability, as you know what your monthly payments are going to be—key for those who have a lower risk appetite—but they come with a contract, usually tied in for 2 or 5 years. They are also more attractive as interest rates are lower than variable rates.

With a variable rate you are paying for flexibility, as you can change your mortgage provider at any time, as long as you meet affordability and criteria, but you will pay higher monthly premiums. It is rare for anyone to choose a variable rate in the current landscape, as interest rates are much higher than fixed rates.”

What is likely to happen with interest rates?

Karl:
“Experts are predicting a fall in the Bank of England Base Rate this year—some predicting it could be 3% before the year is out. The truth is no one truly knows, as the Base Rate is determined by lots of different factors.

There is cautious optimism that mortgage rates will continue to fall, and we are keeping everything crossed they do. We want home ownership to be as affordable as possible for buyers.”

A Strong, Positive Outlook for Buyers

With lenders offering more flexible criteria, low-deposit and even no-deposit mortgage options, and growing optimism around interest rates, the market is presenting genuine opportunities for buyers—particularly those considering new-build homes. Combined with the long-term benefits of owning rather than renting, now is an excellent time to explore your options and take the next step towards home ownership.

Take the Next Step with Expert Mortgage Advice

If you’re considering buying with Erris Homes, our specialist mortgage partner Evolve Financial Solutions is here to help you navigate your options and secure the right mortgage for your circumstances.

Erris Homes
Tel: 0113 531 0000
Email: info@errishomes.com

Evolve Financial Solutions
Tel: 01473 603 211
Email: askus@evolvefs.com

Speak to our team today and start your journey towards owning your new Erris home.