SUB 3% mortgages could be on the cards as the Bank of England hints at more “aggressive” rate cuts.

It comes after a host of major lenders have made reductions to rates.

1

The news follows Governor Andrew Bailey stating the Bank of England could be “more aggressive” in cutting interest rates.

Mr Bailey said that if inflation remains in check the Bank might be able to be “more activist” over reducing borrowing costs.

The comments have led several experts to bring forward predictions for interest rate cuts.

British interest rates currently sit at 5%. The rate – which is used by banks to determine the interest on mortgages and loans – was reduced from 5.25% in August.

Members of the Bank’s Monetary Policy Committee (MPC) voted to keep rates at 5% at the latest vote in September, but economists are currently pricing in another reduction at next month’s meeting.

Gabriel McKeown, head of macroeconomics at Sad Rabbit Investments said: “Governor Bailey’s bombshell comments have opened the floodgates to more aggressive rate cuts, with the prospect of sub-3% mortgages, once dismissed as a pipe dream, now emerging as a tantalising possibility for homeowners.

“These views significantly depart from earlier comments advocating for gradual rate reductions, leading swap rates to fall sharply.

“Markets are now pricing in an all but certain chance of a rate cut at the Bank’s next meeting in November.”

He added that the prospect of reduced borrowing costs and increased competition in the mortgage market should help drive the rate-slashing momentum towards the end of 2024.

Elsewhere, Adam Stiles managing director at Helix Financial Partners pointed out that Skipton Building Society is already offering a sub-3% product transfer mortgage at 2.89% – although it comes with a hefty 3% fee and is up to 60% loan-to-value.

Mr Stiles told The Sun: “If the Bank of England delivers one more rate cut, which seems likely after Andrew Bailey’s hints this week, that could quickly feed through into swap rates, which determine lenders’ fixed rates.

“However, we are only likely to see sub-3% rates at lower loan-to-values. We don’t expect to see them widespread at higher loan-to-values until we have a few more rate cuts, which is possible by mid-2025.”

Dariusz Karpowicz, who is director at Albion Financial Advice, said that it’s not “unrealistic” that we’ll see rates drop below 3%.

He said: “All the signs point to it – some rates below 3%! Swap rates are falling, and Andrew Bailey is hinting at a potential decrease. The economic outlook is improving, and lenders are already trimming rates almost every week.

“It’s not unrealistic to see rates dipping below 3% for lower LTVs before year’s end. Of course, only an unexpected ‘black swan’ event could derail this positive momentum.”

What is happening to swap rates?

A swap rate is a rate based on what the markets think interest rates will be in the future.

If the rates rise, then mortgage lenders will look to increase their rates so that they don’t lose out. 

The BoE comments have had a “positive” impact on swap rates.

A number of lenders have already announced repricing and more are expected to follow suit, according to mortgage broker SPF Private Clients.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “A more aggressive approach to rate reductions has been welcomed by the markets, with swaps falling on the back of the Governor’s comments, which should feed through to even lower mortgage pricing.

“A number of lenders are already in the process of repricing – Coventry [building society]’s two and five-year fixes which top the best buy tables at 3.89 and 3.69% respectively are being pulled tonight, while HSBC is repricing downwards today and NatWest and Barclays are repricing tomorrow.

“Santander is also repricing tomorrow and is likely to top the ‘best buys’ with its new deals – a two-year purchase option at 3.84% for those borrowing 60% loan-to-value and a five-year fix at 3.68%, also at 60% LTV.”

He said the ongoing rate war among lenders is “great news” for borrowers as there are some “really compelling” deals being launched, which will go some way to helping affordability.

Different types of mortgages

We break down all you need to know about mortgages and what categories they fall into.

A fixed rate mortgage provides an interest rate that remains the same for an agreed period such as two, five or even 10 years.

Advertisement

Your monthly repayments would remain the same for the whole deal period.

There are a few different types of variable mortgages and, as the name suggests, the rates can change.

A tracker mortgage sets your rate a certain percentage above or below an external benchmark.

This is usually the Bank of England base rate or a bank may have its figure.

Advertisement

If the base rate rises, so will your mortgage but if it drops then your monthly repayments will be reduced.

A standard variable rate (SVR) is a default rate offered by banks. You usually revert to this at the end of a fixed deal term, unless you get a new one.

SVRs are generally higher than other types of mortgage, so if you’re on one then you’re likely to be paying more than you need to.

Variable rate mortgages often don’t have exit fees while a fixed rate could do.

Advertisement

What are lenders doing?

This week five more mortgage lenders have announced cuts to mortgage rates.

Barclays, HSBC, Halifax, Santander and NatWest are all making several rate reductions across a range of mortgage deals.

It follows a recurring theme of cuts over the past few months.

Since the beginning of July, the lowest five-year fixed rate mortgage has fallen from 4.28% to 3.69%.

Elsewhere, the lowest two-year fix has fallen from 4.68% to 3.89%.

Barclays was first off the bat, announcing cuts that mainly affect first-time buyers and home movers, including some sub-4% deals for borrowers with the biggest deposits.

Its lowest two-year fix for buyers with a 40% deposit or more fell to 3.99% from today.

HSBC has implemented another wave of mortgage rate cuts.

It says all its residential and buy-to-let deals have now been reduced by up to 0.16 percentage points.

HSBC confirmed its two-year and five-year fixed mortgages for both home movers and first-time-buyers have been cut by up to 0.25 percentage points.

Its lowest five-year fix for those remortgaging with at least a 40% equity is now priced at 3.83%.

Halifax was next up to announce a cut taking place from today.

The UK’s biggest lender cut mortgage rates on selected products by up to 0.11 percentage points for home movers and first-time buyers.

Halifax also confirmed reductions of up to 0.24 percentage points for homeowners due to remortgage.

Santander and NatWest also announced a wide range of range cuts for today.

Santander’s fixed-rate deals dropped by 0.29 percentage points for home buyers and those remortgaging.

It means Santander now offers the lowest five-year fix on the market for home buyers purchasing with the biggest deposits.

All its mortgage rates for new build purchases are also reducing by up to 0.19% alongside all its buy-to-let fixed rates, which are dropping by up to 0.17%

Meanwhile, NatWest is also executing some healthy cuts across fixed-rate deals aimed at home buyers and remortgagers.

Does everyone agree sub-3% deals are looming?

In short, no. Not everyone agrees that these -3% deals are on the way.

This is largely due to positive moves being scuppered by global events and the fact that interest rates are notoriously hard to predict.

Not to mention that Labour’s first Budget is just a few weeks away.

Jack Tutton, director at SJ Mortgages told us: “If the pace of rate reductions that we are currently enjoying continues until the end of the year, sub-3% rates would be a real possibility.

“However, there are many things that could derail this optimism. The Autumn Budget will be the biggest hurdle. The decisions that the Chancellor takes will be a make-or-break moment for interest rates.”

Meanwhile, Elliott Culley, who is the director at Switch Mortgage Finance, says he believes there is a “slim” chance of rates hitting below 3%.

He said: “It would be a huge turnaround if mortgage rates were to fall below 3% by the end of the year.

“However, I would expect the chances of this happening being slim based on current domestic and world events.”

Others are pretty certain this will not be the case.

“With all the uncertainty ahead of the upcoming Budget, there is more chance of Bruno Fernandes getting Player of the Month than rates returning to sub-3%,” David Stirling Independent Financial Advisor at Mint Mortgages & Protection said.

“With Middle East issues escalating and causing volatility in oil prices as we enter winter, added to the potential tax hardships to come, it’s hard to see rates normalising below 3% this year.”

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

WETHERSPOONS has confirmed that 26 of its pubs have closed for good since July 2023, with five more at risk.

Pubs have closed in locations across the UK, including Stafford, London, Halifax and Penarth.

1

A further five pubs have also been put up for sale, four of which are already under offer.

The Ivor Davies in Cardiff is up for sale, while the four pubs under offer are the Sir Daniel Arms in Swindon, the Hain Line in St Ives, the Foot of the Walk in Leith and the Quay in Poole.

Under offer may mean that a bid is being considered or has been accepted.

But as the sale has not been finalised the pub remains on the market.

Wetherspoons regularly reviews the branches it has up for sale and has often taken venues off the market to continue operating as part of the pub chain.

In its annual report published today the pub giant said the disposal of the 27 pubs it has closed gave rise to a cash inflow of £8.9 million.

Wetherspoons has sold the freehold of premises it owned outright and returned others to their landlords.

The pub sites sold may reopen to welcome drinkers under their new owners.

Landlords could also find new tenants, so Wetherspoons’ departure doesn’t necessarily mean the loss of a pub for locals.

The sites closed are:

• The Saltoun Inn, Fraserburgh – sold
• Widow Frost, Mansfield – sold
• General Sir Redvers Buller, Crediton – sold
• Butler’s Bell, Stafford – sold
• Coronet, Holloway Road, London – sold
• White Hart, Todmorden – sold
• Asparagus, Battersea – sold
• Mock Beggar Hall, Moreton – sold
• Sir Norman Rae, Shipley – sold
• Lord Arthur Lee, Fareham – sold
• Market Cross, Holywell – sold
• The Cross Keys, Peebles – sold
• The Regent, Kirkby in Ashfield – sold
• An Geata Arundel, Waterford – sold
• Jolly Sailor, Hanham – sold
• Millers Well, Purley, Halifax – sold
• The London & Rye in Rushey Green, Catford – sold
• Bankers Draft, Eltham – returned to landlord
• Sir John Arderne, Newark – returned to landlord
• Night Jar, Ferndown – returned to landlord
• Moon and Bell, Loughborough – returned to landlord
• Capitol, Forest Hill – returned to landlord
• Hart and Spool, Borehamwood – returned to landlord
• Alfred Herring, Palmers Green – returned to landlord
• Tichenham Inn, Ickenham – returned to landlord
• Bears Head, Penarth – returned to landlord

Wetherspoons has also opened two new sites in the last 12 months – The Captain Flinders near Euston Station and the Star Light at Heathrow Airport, and The Grand Assembly in Marlow.

A number of sites have also been expanded including the Red Lion,
Skegness; the Talk of the Town, Paignton; the Albany Palace, Trowbridge and the Mile Castle, Newcastle.

Wetherspoons, which has around 800 pubs across the UK, continues to draw crowds with ambitions openings.

A huge new £3.5million pub opened in the countryside town of Marlow, in Buckinghamshire, on September 24.

Plus, Wetherspoon opened its first pub at a holiday park at Haven’s Primrose Valley in Filey, North Yorkshire in March.

In an exclusive interview with The Sun, Wetherspoons boss Sir Tim Martin he is planning to ramp up plans to launch “Super Spoons” pubs – making existing sites even bigger.

It has recently made a big bet on giant pubs, such as its one in Ramsgate which can cater up to 1,400 punters.

And work on its “Super Spoons” in Newcastle is now underway which will include a 26-bedroom hotel and 3,000 sq ft beer garden.

Martin also exclusively revealed to The Sun that he would not be putting up prices this year in good news for drinkers.

In its annual report to for FY24 Wetherspoons reported sales of £2,036million – an increase of 5.7% on the previous year.

Like-for-like sales were up 7.6%, driven by an 8.9% increase in bar sales and a 5.6% increase in food sales.

Profit before tax saw a dramatic uptick from £42.6m in FY23 to £73.9, in FY24.

Martin has previously said he aims to have 1,000 pubs.

What is happening to the hospitality industry?

Many food and drink chains have been struggling in recent years as the cost of living has led to fewer people eating out.

Businesses had been struggling to bounce back after the pandemic, only to be hit with soaring energy bills and inflation.

Multiple chains have been affected, resulting in big-name brands like Wetherspoons and Frankie & Benny’s closing branches.

Some chains have not survived. Byron Burger fell into administration last year, with owners saying it would result in the loss of over 200 jobs.

Pizza giant Papa Johns is shutting down 43 of its stores soon.

Tasty, the owner of Wildwood, said it will shut sites as part of major restructuring plans.

How can I save money at Wetherspoons?

Advertisement

FREE refills – Buy a £1.50 tea, coffee or hot chocolate and you can get free refills. The deal is available all day, every day.

Check a map – Prices can vary from one location the next, even those close to each other.

So if you’re planning a pint at a Spoons, it’s worth popping in nearby pubs to see if you’re settling in at the cheapest.

Choose your day – Each night the pub chain runs certain food theme nights.

For instance, every Thursday night is curry club, where diners can get a main meal and a drink for a set price cheaper than usual.

Advertisement

Pick-up vouchers – Students can often pick up voucher books in their local near universities, which offer discounts on food and drink, so keep your eyes peeled.

Get appy – The Wetherspoons app allows you to order and pay for your drink and food from your table – but you don’t need to be in the pub to use it. 

Taking full advantage of this, cheeky customers have used social media to ask their friends and family to order them drinks. The app is free to download on the App Store or Google Play.

Check the date – Every year, Spoons holds its Tax Equality Day to highlight the benefits of a permanently reduced tax bill for the pub industry.

Advertisement

It usually takes place in September, and last year it fell on Thursday, September 14.

As well as its 12-day Real Ale Festival every Autumn, Wetherspoons also holds a Spring Festival.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

DISCOUNT retailer B&M has slashed the price on tubs of sweets that are perfect for Halloween.

The popular confectionery is flying off the shelves as shoppers get wind of the amazing offer.

1

Just £1 buys a 1kg drum of Haribo Supermix when you shop in store.

Usually you would pay a lot more for the sweet treats, for example, Iceland is currently selling 1kg tubs for £6m while Sainsbury’s has the 400g size on sale at £3.

Details of the fiendishly fab offer were posted on the Latest Deals website and quickly attracted lots of comments.

“Well this is Halloween sorted. A great offer! Thanks for sharing,” said one shopper.

Another posted: “Wow!!, fantastic price perfect for Halloween for when the little ones come knocking in their great costumes.”

And another commented: “Amazing price. What can you get for £1 nowadays. Will keep my eyes peeled.”

The offer is available in store on Haribo Supermix – the one with the milk bottles and tangy mini figures.

We have also found the same offer at B&M on 1kg tubs of Haribo Giant Strawbs, though sadly not on Starmix or Tangfastics. 

As well as Halloween the tubs should come in handy for the festive season.

“I love Haribo and at this price may have to treat the family.  Perfect for keeping for Christmas as well,” said one happy commenter.

“Now that’s a price for everyone, even if you don’t like sweets. Great for Christmas as well as Halloween,” posted another.

It’s always worth shopping around to find the best deals before buying.

Using websites like Latest Deals, or price comparison websites such as Trolley or PriceSpy can help you check prices and find special offers from hundreds of retailers.

Typing what you’re after into Google Shopping will also bring up a raft of prices and retailers, while joining Facebook groups such as Bargains UK and Extreme Couponing will alert you to discounts as soon as they’re spotted by members.

As 31 October approaches you may well find other great price cuts on confectionery, especially Halloween-theme sweets and chocolates because retailers won’t want to be left with stock after the event.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

POPULAR Nestle chocolate Smarties Buttons have been discontinued.

Fans of the sweet treat say they’ve been hunting high and low for them and have been devastated by the axe.

1

The treat comprised a tasty combination of milk chocolate buttons with crunchy bits in, but maker Nestle said it now wants to focus on its core Smarties products.

The decision is a blow to fans, including one who took to social media last month to ask Nestle where they had gone.

He said: “Have the smarties buttons been discontinued? I love them but can never find them anymore and when I look at the links to purchase them every outlet is showing out of stock. Any idea where I can get some from?”

The product was unveiled in 2020 as a “reimagined” treat for choc-lovers with “special memories” of Smarties.

Since then it has earned rave reviews, including one on the Tesco website which enthused: “Opened up the pack and ended up eating them all on one go. Couldn’t stop!!”

Another added: “A nice way to expand on the Smarties brand for a more chocolatey smarties treat!”

At the time of their launch, Alberto Pisanello, brand manager for Smarties, said: “We know that Smarties hold special memories for so many people, and they are much loved for their bright colours, taste and texture.

“At the same time, consumers tell us they like their favourite brands to keep things fresh with exciting innovations and new varieties to try.”

He added they offered all the fun, colour and crunch of Smarties, enveloped in a smooth milk, white or orange-flavoured chocolate button.

Later a gold version was unveiled.

But this week manufacturer Nestle said: “We are waving goodbye to Smarties Buttons which we know has been a beloved product and we appreciate the support it has received.

“However, we have made the decision to discontinue it as we focus on our main Smarties products.

“Smarties fans may want to keep an eye out for the new Smarties Elf Treats giant tube, which is hitting stores now in time for Christmas.”

Smarties have a fascinatingly long history.

They were originally released in 1882 under the name Chocolate Beans, and were renamed Smarties Chocolate Beans in 1938.

Smarties went out of production in the war but resumed production in January 1946, though plain chocolate often had to be used in place of milk due to shortages.

The treats have remained popular, but are now no longer sold in their iconic cylindrical cardboard tubes, which came with a colourful plastic lid.

The packaging design changed to hexagonal in 2005, to keep the brand “fresh”, and the lid was replaced by a cardboard clip for environmental reasons.

Investment and wealth management firm IPS Capital has moved closer to £1bn of assets under management with the acquisition of Greenwood Financial Planning.

The acquisition of Saffron Walden-based Greenwood bolsters IPS’s financial planning services and enhances Greenwood’s investment management offering.

It also boosts IPS’s AUM to £950m.

Mike Passfield and Richard Mumford will remain partners of Greenwood, with Passfield becoming a partner of IPS.

IPS managing partner, Jonathan Blain, said: “We are delighted to have joined forces with Mike, Richard and the team.

“They have a solid, well managed business, providing great client outcomes.

“This is another step towards the next milestone of £1bn AUM, delivering a professional well-rounded service offering to our clients.

“We are proud that the firm remains 100% in the hands of the working partners with the culture that this engenders, allowing us to make selective transactions such as this and adopting the best from both sides.”

Passfield said: “We’ve got to know Jonathan and the team at IPS over a couple of years and have been impressed with their business and culture, putting client needs at the absolute centre of their business, in a similar way to us.

“Richard and I consider this an ideal fit and are really looking forward to working closely with them and continuing the growth of Greenwood.”

CHRISTMAS is an expensive season and if you’re on benefits it can be really tough financially.

However there is help available in the form of a Budgeting Advance, which pays up to £812 for any one-off expense.

1

You’re eligible to claim if you’re on certain benefits, including Universal Credit and while you do have to repay it, there are no interest charges on the money you borrow.

This means it’s more cost-efficient than a bank loan or buying on your credit card and could come in handy if your fridge freezer or oven fails in the run-up to the big day.

Payments are deducted directly from your benefit and spread over two years, with repayment amounts agreed when your application is accepted.

Who is eligible for a Budgeting Advance?

If you receive Universal Credit, Income Support, Employment and Support Allowance, Pension Credit, or Jobseeker’s Allowance, then you could be eligible for a Budgeting Advance.

Your earnings must not have been above £2,600 (£3,600 for couples) in the past six months. Additionally you need to have been in receipt of your benefit for at least six months.

If you already have a Budgeting Advance you have yet to pay back, then you cannot take out a new loan.

You must also confirm you are able to afford the repayments as they will be taken directly from your benefits.

A Budgeting Advance can be used for a number of unexpected costs, including:

• A broken appliance such as a fridge or cooker
• Repairs to your home
• Moving costs
• Essential items
• Maternity expenses
• Work-related costs such as travel, or buying a uniform or tools
• Funeral expenses

How much can you borrow?

You can borrow up to £812 if you have children, £464 if you’re a couple and up to £348 if you’re single.

The minimum amount you can borrow is £100, however the actual amount agreed depends on how much you need.

Loans also depend on how much capital – money, investment, savings and some types of property – you have. 

If you have more than £1,000 then the Budgeting Advance will be reduced by the amount over £1,000.

So for example if you have £1,300 the amount you could borrow would be cut by £300.

How to repay the Budgeting Advance

Repayments will be taken directly from your future Universal Credit or other benefit payments and you will be told how much they will be when your application is accepted.

You have up to two years to repay the advance and you’re still liable for repayments even if you no longer receive benefits.

If you start work you will be expected to repay the loan through your salary.

How to apply for a Budgeting Advance

You can apply for the Budgeting Allowance through your Universal Credit account, via the Universal Credit helpline on 0800 328 5644, or through your local Jobcentre.

You will be asked if you have any existing debt as the advisor will need to make sure you can afford the repayments and you will also be asked about any savings.

You should receive a decision on your application the same day.

There is no appeal if you’re turned down, but Citizen Advice says you can ask for your application to be looked at again.

If you can show your circumstances have changed this could help.

What can I do if I’m not eligible?

If you haven’t received your first Universal Credit payment and you need help with bills you can apply for an Advance Payment.

This can be up to 100% of your estimated first payment and you have up to two years to pay it back.

For claims due to a change in circumstances the repayment term is generally six months.

Repayments will be deducted from your first benefit payment then taken from subsequent payments until the advance is cleared.

You can apply for the Advance Payment through your Universal Credit account or through your Jobcentre Plus work coach. The Universal Credit helpline can also assist with your application.

The Advance Payment is a loan and you will be liable to repay it even if you stop claiming benefits, for example through your wages.

Repayments can be delayed in certain cases for up to a month for change of circumstance applications and up to three months for new claimants.

If you fail to keep up with repayments the Department of Work and Pensions could take them at source from your wages or contract a debt collection agency to collect the money.

Are there any alternative kinds of support available?

Cost of living support can help with utility bills, housing costs and NHS prescriptions. 

Citizens Advice can also help with information on benefits you might be entitled to as well as help with budgeting and managing bills.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories