Summer Mortgage Series 2026: UK Mortgage Market News , Lenders Cut Rates as Asking Prices See Biggest August Drop Since 2018

The UK mortgage market has delivered some welcome news this week.

After fixed mortgage rates rose at the beginning of August, several lenders have now reversed direction and announced a wave of rate cuts. At the same time, Rightmove has reported that asking prices for newly listed homes fell by 2.0% in August , the biggest August drop since 2018.

For buyers and homeowners in Woking, this creates a market with more movement, more choice and, potentially, more room to negotiate. But we understand that mortgage news can still feel overwhelming, stressful and confusing, particularly when rates appear to change almost as quickly as the British weather!

So, let’s talk you through the key developments from the week ending Friday 21 August 2026.

This week’s mortgage market at a glance

• The Bank of England held the base rate at 3.75%.
• Fixed mortgage rates had risen earlier in August, with average two-year fixes reaching approximately 5.09% to 5.63%, depending on the source and the point at which the data was recorded.
• Nationwide reduced selected fixed rates by up to 0.15% from 18 August.
• Nationwide’s lowest reported rate is now 4.48% for a two-year fixed mortgage at 60% loan-to-value.
• HSBC cut selected rates by up to 0.20% from 19 August and increased its lending limits.
• Virgin Money also cut selected two- and five-year fixed rates.
• Rightmove recorded a 2.0% fall in newly listed asking prices, taking the average to £364,999.
• Available homes for sale are at a 12-year high, giving buyers more choice.
• Rightmove downgraded its 2026 asking-price forecast from +2% to between 0% and -2%.

The Bank of England holds the base rate at 3.75%

The Bank of England has kept the base rate at 3.75% in August.

The base rate is the interest rate set by the Bank of England. It influences the cost of borrowing across the economy and can directly affect tracker mortgages and some variable-rate products.

The decision to hold reflects continuing inflation risks. Volatile energy prices, linked in part to conflict in the Middle East, could put further pressure on household bills and inflation later in the year.

For Woking homeowners with a tracker mortgage linked to the base rate, the hold means there is no automatic rate change as a result of this decision.

Fixed-rate mortgages work differently. Their pricing is influenced by wider financial markets and lender funding costs, which means fixed rates can change even when the Bank of England does not move its base rate.

You can read the Bank of England’s latest Bank Rate information for further background.

Rates rose earlier in August , and now lenders are cutting

The beginning of August was unsettling for many borrowers. Some lenders increased their fixed-rate pricing, and average two-year fixed rates moved to roughly 5.09% to 5.63%, depending on the source and the timing of the figures.

That left many buyers wondering whether they should secure a mortgage quickly or wait to see what happened next. We appreciate how difficult that decision can feel. It is rather like trying to choose whether to buy an ice cream now or wait for the possibility of a two-for-one deal later , except the sums involved are considerably larger!

This week, the direction has changed.

Nationwide reduced selected fixed rates by up to 0.15%, effective from 18 August. Its lowest reported rate is now 4.48% for a two-year fixed deal at 60% loan-to-value.

Loan-to-value, or LTV, simply means the percentage of the property’s value you are borrowing. For example, borrowing £200,000 on a £400,000 property gives you an LTV of 50%.

HSBC cut selected rates by up to 0.20% from 19 August across first-time buyer, purchase and remortgage products. It also increased certain lending limits, which may help some borrowers who need a larger mortgage relative to their income.

Virgin Money has cut selected two- and five-year fixed rates from 19 August, adding further competition to the market.

These reductions will not apply to every mortgage product, and the lowest headline rate will not necessarily be available to every applicant. Your deposit, income, credit history, property type, mortgage term and loan size will all matter.

Nevertheless, lender competition is encouraging news. It means there may be more opportunities to review your options rather than accepting the first deal you see.

Rightmove reports the biggest August asking-price fall since 2018

Rightmove’s latest data shows that asking prices for newly listed homes fell by 2.0% in August, equivalent to a reduction of £7,360. The average asking price is now £364,999.

August typically brings a seasonal dip in asking prices, but this fall is notably larger than the ten-year average August decline of 1.3%. It is also the biggest August drop since 2018.

Annual asking prices are now 1.0% lower, representing the steepest yearly fall since December 2023.

Rightmove also reported that the number of homes available for sale is at a 12-year high. More available properties mean sellers are competing with one another for buyers’ attention, which can create more scope for sensible negotiation.

As a result, Rightmove has reduced its 2026 asking-price forecast from growth of 2% to a range between 0% and -2%.

It is important to remember that asking prices are not the same as completed sale prices. An asking price is what a seller hopes to achieve; the eventual agreed price may be different. Local conditions can also vary considerably, so national data should be treated as useful context rather than a valuation of a particular Woking property.

The official ONS and Land Registry UK House Price Index provides a different perspective. It showed that annual UK house-price inflation slowed to 2% in June 2026, with the average property value at approximately £272,000.

What does this mean for Woking buyers?

For buyers in Woking, the combination of lower selected mortgage rates and increased housing supply could provide a little more breathing space.

You may have more properties to compare and more time to consider whether a home genuinely suits your plans. Perhaps you are looking for a larger garden, a state-of-the-art kitchen or a cosy home office. A calmer market can make it easier to assess the property rather than rushing because you fear it will disappear immediately.

Start by working out what monthly payment feels comfortable, rather than simply borrowing the maximum a lender may offer. Remember to allow for council tax, energy bills, insurance, maintenance, transport and the other costs of running a home.

If you are saving for a deposit, keep going. Small savings can make a difference over time. Swapping a few expensive artisanal coffees for a home-brewed option will not solve every affordability challenge, of course, but regular changes to spending can help you put some extra pennies aside!

Don’t be afraid to negotiate on a property where the asking price appears ambitious, particularly when sellers have more competition. However, make sure your mortgage position is clear before making an offer.

A mortgage agreement in principle can help you understand your potential budget, although it is not a guarantee that a lender will approve the final application.

What does this mean for Woking sellers?

If you are selling your Woking home, the Rightmove figures are a reminder to price carefully.

With more properties available, buyers may be comparing homes more closely. Overpricing could mean fewer viewings, a longer time on the market and later price reductions.

We recommend speaking with a property professional about realistic local expectations and considering how your sale fits into your wider mortgage plans. If you are buying another property, a clear understanding of your likely borrowing position can help you negotiate with greater confidence.

A successful move is not just about achieving the highest possible asking price. It is also about finding a buyer, keeping the chain moving and making sure your next mortgage remains affordable.

Could this be a good time to review your mortgage?

This week’s lender cuts may make it a sensible time for Woking homeowners to seek remortgage advice, particularly if your current fixed-rate deal is due to end within the next three to six months.

Remortgaging means taking out a new mortgage on a property you already own. You may be able to secure a better rate, reduce your monthly payments, change the mortgage term or consider additional borrowing for suitable home improvements.

However, do not focus only on the advertised interest rate. Check the full cost, including arrangement fees, valuation costs, legal fees and any early repayment charge.

An early repayment charge is a fee that may apply if you leave your existing mortgage before the end of its deal period. This does not necessarily mean you should wait. Instead, compare the charge with the potential savings from changing mortgage, and ask us to talk you through the numbers.

Starting early can give you more time to compare products and, where appropriate, secure a new rate in advance.

Our guide to remortgaging for residential properties explains some of the reasons homeowners review their mortgage.

Remember mortgage protection insurance

Mortgage rates and house prices are important, but protecting your ability to keep making the payments is just as valuable.

Mortgage protection insurance is not one single policy. Depending on your circumstances, it may include:

• Life insurance, which can provide a lump sum if you die during the policy term.
• Critical illness cover, which may pay out if you are diagnosed with a specified serious illness.
• Income protection, which can provide a regular income if illness or injury prevents you from working.

No policy can remove every financial worry, and the right cover depends on your income, family responsibilities, health, occupation and budget. But reviewing your protection can provide valuable reassurance, particularly if your household relies on one or two incomes to cover the mortgage.

Our mortgage protection guide explains the different types of cover in more detail.

Our view: stay alert, but don’t panic

This week’s rate cuts are encouraging, but the market remains changeable.

The base rate is still 3.75%, fixed rates rose earlier in August and lenders are now adjusting their pricing again. Meanwhile, asking prices have fallen and available housing stock is high.

For buyers, this may mean more choice and negotiating power. For sellers, it reinforces the importance of realistic pricing. For homeowners nearing the end of a fixed deal, it is a good reason to review your mortgage sooner rather than later.

As an experienced mortgage advisor Woking residents can speak to, we can compare your options and explain the jargon in plain English. As a mortgage broker Woking homeowners and buyers can rely on, we have access to more than 12,000 mortgage products and can handle much of the paperwork for you.

We’re always here to help relieve the stress and talk you through your specific circumstances.

Whether you are buying your first home, moving, reviewing your deal or looking for protection, please contact our local team at Alexander James Mortgage Services. We would be delighted to support your journey in Woking : and we can also help clients in Camberley and Guildford.

Mortgage rates and product availability can change. Your property may be repossessed if you do not keep up repayments on your mortgage. Protection policies are subject to eligibility, terms, conditions and exclusions.

More Posts