The summer purchase season for the UK housing market is quickly coming to an end.  Mortgage rates are starting to reflect the change in seasons as the demand for housing is cooling of and the rates are lowering.  Many banks are now offering more appealing deals than they did earlier in the year.  The list is distinguished and includes Nationwide, Skipton, Halifax, Virgin Money and Woolwich.  HSBC and Santander are also following suit somewhat as they are eliminating some of the typical fees associated with remortgaging and buying loans.

According to David Hollingworth of London & Country, there are three main factors affecting the rate cuts which many banks are now offering. 

The first influence is swap rates.  Banks calculate a swap rate when they borrow funds from another bank in the mortgage process.

Hollingworth commented on swap rates, saying: "Swap rates are an indicator of market sentiment and in this case could be interpreted that the market is less worried about an increase in the Bank of England base rate this year.

"So to stay competitive and appeal to new customers, mortgage lenders are passing on the reduction in costs by way of lower rates.”

Hollingworth commented on the second factor affecting rates, lending criteria, saying: "Some lenders were hesitant while the new rules came in but are now getting back into the normal swing of things.”

The third factor influencing rates is the time of the year.  Even though the summer buying season is ending, autumn is annually one of the biggest seasons to purchase.

Hollingworth commented on the time of year, saying: "Also, most lenders' financial years run January to December, so as we enter the final quarter of the year some lenders will be aiming to boost their lending figures by offering good deals to remortgage customers so they can write new business quickly."