Money blog: UK mortgage rules could be about to change (2025)

Top news
  • UK mortgage rules could be about to change
  • Trump gives date for tariffs
  • Chancellor interferes on mis-sold car insurance case to help big banks
  • Three London airports 'poised for expansion' under government plans
Essential reads
  • Where on Earth do you start with a stocks and shares ISA?
  • Landlord withholding your deposit? Here's how you can fight it
  • 'I only have two bills and get a pension after 12 years': Soldier reveals financial benefits of army
  • 'If I turn up at your door you're probably getting thousands - sometimes millions'

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07:40:11

Trump gives date for tariffs

Across his US election campaign, Donald Trump repeatedly raised the prospect of using tariffs against other countries.

In a nutshell, this taxes imports - the idea being to make US products more appealing, though some argue tariffs simply drive prices up for everyone.

For the first time overnight, Trump gave a date for potentially bringing them in.

He vowed to hit the European Union (EU) with tariffs and said his administration was discussing imposing an additional 10% tariff on goods imported from China from 1 February because, he claimed, fentanyl was being sent from China to Mexico and Canada, then on to the US.

"The European Union is very, very bad to us, so they're going to be in for tariffs. It's the only way... you're going to get fairness," he said.

07:17:38

Where on Earth do you start with a stocks and shares ISA?

For this week's guide, Kirsty Stone, a chartered financial planner fromThe Private Office,tells us how to get started with a stocks and shares ISA...

What is astocks and shares ISA?

This is a type of ISA that you can use to invest in shares, funds, investment trusts or bonds.

You don't have to pay UK income tax or capital gains tax on money you earn from investments made through a stocks and shares ISA.

"You can contribute up to £20,000 per year into your ISAs - this could includestocks and shares ISA, cash ISAs, lifetime ISAs or a combination, but it's important to remember that this limit applies across all ISAs you open in a single tax year," Stone says.

What are the pros of having one?

"If you've been thinking about growing your savings and you have regular surplus income or capital set aside which is not needed in the short term, astocks and shares ISAcould be an option worth considering," Stone says.

"The beauty of an ISA is that the returns you earn are all tax-free, which can really help your money grow faster compared to regular savings accounts, where interest is often taxable - and so too are capital gains if you sell investments that are not held within a stocks and shares ISA wrapper."

If you have a medium or long-term savings goal, Stone says a stocks and shares ISA is worth considering over a cash ISA.

"Over the long term, investing in stocks and shares has traditionally provided better returns than leaving your money in a regular cash-based savings account," she explains.

"Historically, the stock market has offered stronger growth, especially if you're willing to invest for the long term (typically a minimum of 5, 10, or even 20 years). However, of course, like all investments, there are risks involved."

What are the cons?

Unlike a savings account where your money is guaranteed to grow either at a fixed or variable rate, astocks and shares ISAis subject to market fluctuations.

This means that investment returns are not guaranteed and you may get back less than originally invested.

"The value of your investments can go up, but it can also go down, and in the short term, you have to be prepared to ride out these fluctuations," Stone says.

Many investment platforms or providers also charge a fee to have astocks and shares ISA, she adds, saying it is important to shop around and compare platforms.

What can you do to get started?

For someone who hasn't invested before, Kirsty warns the world of investing can be very daunting - but you can seek independent financial advice from a professional to help you.

"For those who do not wish to do this, you'll need to decide what markets or assets to allocate your ISA contribution to, how to diversify it and how much risk you're comfortable taking with your investment," she says.

"If you're unsure about how to pick investments or feel intimidated by the choices available, you might find it helpful to start with a prebuilt portfolio by the company you choose to open your ISA account with."

These portfolios can factor in what level of investment risk you wish to take and any ethical or sustainable preferences you have with your savings.

Stone says: "Often investing in a fund rather than an individual share of a company offers a greater level of diversification and lessens the risk of one individual company doing poorly as a fund will normally hold dozens of companies at any given time."

If you are already investing outside an ISA, Stone suggests considering switching to astocks and shares ISA.

Unlike pensions or other locked-in investment vehicles, you can withdraw your money whenever you need from astocks and shares ISA, she says.

This is for general information only, does not constitute individual advice and should not be used to inform financial decisions.

06:43:25

UK mortgage rules could be about to change

Every Wednesday, we take an overview of the mortgage market with industry experts and round up the best rates withMoneyfactscompare.co.uk.

In the past week we've had rumblings of changes to mortgage rules.

The Financial Conduct Authority, the UK's financial regulator, is planning to simplify the stricter lending rules brought in after the 2008 financial crisis.

This could potentially make it easier for people to secure a loan.

The FCA indicated it would act just weeks after the prime minister asked every UK regulator to examine ways to boost growth.

The regulator says it is right to question whether the rules are too strict given the low numbers of borrowers missing repayments or having homes repossessed.

But analysts are concerned that any changes don't go too far.

Rachel Springall, finance expert at Moneyfacts, said: "As murmurs for relaxing lending rules circulate, such a shake-up could be a lifeline for those who don't presently tick all the boxes to get a mortgage. However, any changes to lending criteria, such as income multiples, must be done carefully to ensure consumers can comfortably afford their mortgage.

"If consumers borrow too much, then it can see them fall into negative equity if house prices plummet, which in turn could result in a spike of mortgage defaults."

Elsewhere, banks and building societies say they are expecting the demand for mortgages to fall during the first half of this year.

Simon Gammon, managing partner, Knight Frank Finance, said: "Clearly, the lenders think that the beginning of 2025 will be another period of sluggish activity in the housing market. As things stand, this is likely to prove true."

He highlighted recent bond market volatility, which could have an impact on the cost of some mortgages.

Here's a look at the lowest rates available for first time buyers...

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

In the wider housing market, despite the warnings outlined above, property prices have seen their biggest new year bounce since 2020, according to Rightmove.

The estate agent said the average asking price has risen by just under £6,000 in January.

This took the average asking price to £366,189, although this is still £8,942 below a record set in May 2024, reflecting affordability constraints, it added.

21:00:01

Automatic pension enrolment threshold frozen for year

The minimum amount staff will have to earn before they are automatically enrolled in a workplace pension will remain at £10,000 for another year, the government has confirmed.

Pensions minister Torsten Bell said it was "important" that automatic enrolment "works for individuals, supporting those for whom it makes economic sense to save towards their pensions" while "ensuring affordability for employers and taxpayers".

The coalition government introduced automatic enrolment in 2012 to increase the number of employees working in private sector jobs saving into workplace pensions for retirement.

Ian Futcher, a financial planner at wealth manager Quilter, said the decision to freeze the threshold "provides stability" but is "a missed opportunity to drive higher contributions".

"The government's decision puts the onus on individuals to ensure they're saving enough for their future," he said.

"While AE [automatic enrolment] has transformed pension saving, those relying solely on minimum contributions may find themselves falling short of the retirement they desire."

19:40:01

Promising start to 2025 for homeowners

Average house prices have risen in the biggest New Year bounce since 2020, according to Rightmove.

The property website said the average asking price for a home coming to market across the UK has increased by 1.7% - or £5,992 - in January.

The rise was a sign of "some new year optimism," with a "record number of early-bird new sellers coming to market" since Boxing Day, Rightmove said.

In its house price index report, the number of new properties coming to market, the volume of buyers contacting estate agents and the number of sales being agreed are all ahead of the same period last year.

Rightmove property expert Colleen Babcock said new sellers "have started the year with a bang," but warned of uncertainties around the incoming changes to stamp duty in spring.

From 1 April, the "nil rate" stamp duty threshold for first-time buyers will reduce from £425,000 to £300,000 in England and Northern Ireland.

Ms Babcock said: "Many buyers are still affordability-stretched, with high mortgage rates restricting borrowing power and limiting what they can afford to pay."

Rightmove has forecast an average asking price increase of 4% across this year, while Zoopla expects average UK house prices to increase by 2.5%.

18:45:01

Gen Z turning down 'unethical' jobs, survey finds

Two in five Gen Z workers in Britain have turned down or avoided applying for jobs they consider "unethical," a survey has found.

Carried out by Co-operatives UK, the poll of workers between 18 and 27 years old also found 42% have considered quitting jobs because a company doesn't have enough social purpose or strong enough values.

Dominic Kendal-Ward, Co-op group secretary and general counsel, said: "Gen Z is driving a real shift in what people expect when they choose where they work."

He continued: "They’re looking for roles that align with their values – whether that's a focus on fairness, sustainability, or creating a positive impact."

The survey found as many as 61% of young workers placed as much importance on their employers’ values as their pay.

Some 90% of respondents felt "like a cog in a wheel of a faceless organisation".

17:50:01

Budget chain moves to maintain 'best paying supermarket' title

Aldi has announced pay rises for all its store workers.

The German-owned chain said staff will be paid at least £12.71 an hour nationally and £14 within the M25.

This will rise further to £13.62 and £14.23 respectively based on the length of service.

The new minimum rate exceeds the Real Living Wage set by the Living Wage Foundation in October and will take effect from 1 March.

"Our colleagues are the best in the business and this latest pay rise reflects our ongoing commitment to ensuring they remain the best paid," Giles Hurley, chief executive officer of Aldi UK and Ireland, said.

Money previously looked at what different supermarkets pay their staff - with Aldi and Lidl coming out on top.

In January, Sainsbury's announced rises that took it near the top of the pile (£13.70 in London and from £12 to £12.45 elsewhere) - but Aldi is firmly ahead again.

Lidl has still to announce its pay rises this year.

17:21:01

Want to buy knives from John Lewis? You'll have to let them scan your face first

John Lewis has introduced AI-powered age verification for shoppers to buy knives online and to stop under-18s from purchasing them illegally.

The retailer is working with British company Yoti, which uses facial age estimation to check if a user is old enough to buy the products.

When adding any knife to a basket on the John Lewis website, users are prompted with a notice which says: "We'll verify your age using facial age estimation at checkout."

At check out, shoppers must provide an image of their face to Yoti and cannot continue to pay unless they consent to the age check.

Yoti's system allows John Lewis to sell knives online after having previously removed them in 2009.

The retailer told Sky News that the technology meets government guidelines, has a very high level of accuracy, and uses anti-spoofing liveness technology - meaning a shopper cannot use a photo of an adult to pass the age check.

It also notes that any order will be completed by Royal Mail or DPD, who will complete an age check on the doorstep using photo ID.

A John Lewis spokesperson added: "We take safety incredibly seriously, and in line with strict government guidelines, have added an additional layer of security when customers purchase knives online.

"By adding facial age estimation at checkout, we can help customers buy from our range of knives while making sure they aren't purchased by anyone under the age of 18."

16:40:01

Chancellor interferes on mis-sold car insurance case to help big banks

By Sarah Taaffe-Maguire, business and economics reporter

Big banks are benefitting from an unusual move by the chancellor - that could make losers of consumers.

Rachel Reeves has stepped in to protect lenders from Supreme Court penalties for mis-selling car insurance.

The Treasury's effort to intervene in an upcoming case could prevent billions being paid out by the banks.

Ms Reeves is said to fear the consequences of such a ruling - chaos in the car finance market, making it harder to get car loans - and a perceived dint in the UK's reputation as a place to do business.

High street bank Santander was reported to be considering exiting the UK partly due to fines it may be subjected to over possible car loan mis-selling. It had put aside £295m to deal with the potential costs.

The biggest beneficiary today was Lloyds Banking Group, whose share value was up more than 4% after the news. It owns the biggest car finance lender, Black Horse.

The losers would be car loan customers and the consumer groups and claims management businesses who had encouraged them to file complaints to finance watchdog the Financial Conduct Authority.

A Treasury spokesperson said: "We want to see a fair and proportionate judgement that ensures compensation to consumers that is proportionate to the losses they have suffered, and allows the motor finance sector to continue playing its role in supporting millions of motorists to own vehicles."

15:53:01

Three London airports poised for expansion under new government plans - reports

Controversial plans to expand Heathrow, Luton and Gatwick airports are expected to be announced as the government attempts to boost the economy.

Ministers are set to approve a third runway at Heathrow, according to Bloomberg - a plan that has long been delayed over environmental concerns.

A second strip for Gatwick is also expected to be brought into full-time use, along with plans to increase the capacity at Luton.

Sources told the news outlet that Chancellor Rachel Reeves is considering making some or all of the announcements in a speech about growth later this month.

Other projects that could be given government sign off are the Lower Thames Crossing, a tunnel beneath London's Thames River, and a Universal Studios theme park north of the capital, they said.

A government spokesman said: "We are determined to get our economy moving and secure the long-term future of the UK's aviation sector.

"All expansion proposals must demonstrate they contribute to economic growth, which is central to our plan for change, while remaining in line with existing environmental obligations."

Money blog: UK mortgage rules could be about to change (2025)

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