Leeds Building Society has announced reductions of up to 0.21% across its mortgage product range, effective from Tuesday, 2nd January 2025. The move aims to ease financial pressure for homeowners renewing their mortgages, first-time buyers, and brokers at the start of the new year.
The rate reductions come ahead of the removal of stamp duty land tax relief on 1st April, which will see the threshold for first-time buyers drop from £425,000 to £300,000. The change is expected to impact around one in five purchases, based on data from January to September 2024.
Jonathan Thompson, senior product manager at Leeds Building Society, said: “As part of our mission of putting homeownership within reach of more people, we have decided to start the year by making purposeful action to help those stepping onto the property ladder or coming to the end of their existing fixed term.
“The reductions we have made on rates across our mortgage product range will support more people to make their homeownership dreams a reality and will take financial pressure off households.
“In 2024, the mortgage market was constrained due to the ongoing pressure of the increasing cost of living, but as a lender, we want to play our part to try to overcome the hurdles people face and help more people into homeownership.”
For existing mortgage holders, these reductions will benefit many of the 328,000 residential mortgages maturing in the first quarter of 2025. For example, a first-time buyer purchasing a home at 90% loan-to-value (LTV) with Leeds’ 2-year fee-free rate of 5.25% on an average house price of £282,000 would save over £450 per year compared to a similar product from January 2024.
Among the featured products are a 5-year fixed rate at 4.89% (down from 4.95%) for up to 90% LTV with no fees and a 2-year fixed rate at 4.15% (down from 4.36%) for up to 65% LTV with a £1,499 fee.
Rachel Springall, finance expert at Moneyfacts, commented: “First-time buyers may well be struggling to amass a large enough deposit to get their foot onto the property ladder, so it’s great to see competitive deals launched onto the market to try and support these buyers.
“The market could always do with more product innovation to help those struggling to get a mortgage as those stuck paying rent may feel their homeownership dreams are scuppered because of the lack of affordable housing, which will take time to improve.”
David Hollingworth, associate director at L&C Mortgages, added: “With the rate outlook still carrying an element of uncertainty, borrowers will need to keep on top of their mortgage costs. Lenders competed hard throughout 2024, and there’s nothing to suggest that will change in 2025. It’s therefore encouraging to see these rate reductions being made so early in the year, improving the choice for first-time buyers, homemovers, and those remortgaging alike.
“The market is likely to be just as fast-moving this year, so advice will continue to play a crucial role for customers looking to target the best deals for them.”
