This week’s top headlines: Virgin, Nationwide and Principality lift mortgage rates and ‘mortgage prisoners’ lose Court of Appeal challenge against TSB.

Explore these and other major industry updates below:Virgin, Nationwide and Principality lift mortgage rates

Virgin Money will increase selected mortgage rates across purchase, remortgage and product transfer deals by up to 0.15%, while also launching new two- and five-year fixes and withdrawing some products.

Principality Intermediaries and Nationwide are also raising selected fixed rates, reflecting rising swap rates and funding costs, although some lenders still offer competitive deals and markets expect a potential Bank of England base rate cut later in the year.

‘Mortgage prisoners’ lose Court of Appeal challenge against TSB

The Court of Appeal has dismissed an £800m legal challenge by mortgage prisoners against TSB, ruling the bank did not breach contracts or statutory duties by charging higher standard variable rates on Whistletree mortgages acquired from Northern Rock in 2016.

Around 400 borrowers argued they were trapped paying rates 2.29% higher than comparable TSB SVRs, but the court upheld an earlier High Court decision in TSB’s favour.

TSB said it had acted fairly and allowed customers to switch products, with around three-quarters since moving or repaying, while the UK Mortgage Prisoners Action Group said it is reviewing the implications as the case continues.

Rates rise at Santander, NatWest and others

Santander, Principality and Gen H are increasing mortgage rates this week, with rises of up to 25 basis points, while NatWest has already raised some rates.

Principality is making the largest increases, particularly on five-year fixed product transfers at 75% LTV, while Santander is lifting selected residential and buy-to-let rates by up to 7bps and 4bps respectively.

Gen H is raising most rates by up to 10bps, with some five-year deals increasing by 15bps, as average mortgage rates continue to edge upwards.

Pivotal acquires CLS Money, enters agreement to buy Simply Lending

Pivotal Growth has acquired CLS Money and agreed to acquire Simply Lending Solutions, both specialist mortgage advisers focused on complex and adverse credit cases.

The firms bring over a decade of experience, strong lender relationships and a combined team of more than 100 staff, generating over £10m in annual revenue, with the move aimed at supporting further growth and expanding Pivotal’s specialist advice offering.

Santander launches five-year 98% LTV mortgage for FTBs

Santander has launched a 98% loan-to-value five-year fixed mortgage for first-time buyers, offering a 5.19% rate with no fee and £250 cashback, requiring at least a £10,000 deposit on properties up to £500,000. The deal aims to help buyers with smaller deposits access homeownership sooner, although advisers note higher LTV borrowing can increase the risk of negative equity and may not suit everyone.

Bank of England expected to hold rates this week

Analysts expect the Bank of England to hold the base rate at 3.75% at its February meeting, with most forecasting cuts later in the year as economic momentum slows.

Economists and investment firms broadly predict reductions from March onwards, with some expecting the rate to fall to between 3% and 3.25% by the end of the year.

Chancellor hails NatWest £10bn social housing pledge

Chancellor Rachel Reeves has welcomed NatWest’s pledge to provide £10bn in funding for social housing by 2028, supporting the government’s push to boost affordable housing supply.

NatWest has already lent £25bn to the sector since 2018 and reached its previous £7.5bn target a year early, prompting the new commitment to help housing associations build more affordable homes across the UK.

OneFamily and Scottish Friendly set to merge

OneFamily and Scottish Friendly have proposed a merger expected to complete in early 2027, creating one of the UK’s largest mutual life assurance providers with nearly £10bn in assets and more than 2.3 million members.

Scottish Friendly chair John McGuigan will chair the combined organisation, while OneFamily chief executive Jim Islam will lead it, subject to regulatory approval, with both firms aiming to strengthen growth, scale and their mutual offering.

Hopes for rate cuts fade as swaps rise: Knight Frank

Expectations of further mortgage rate cuts are weakening as swap rates rise and markets become less confident about Bank of England base rate reductions, according to Knight Frank.

The firm still forecasts UK house prices to grow by 3% in 2026, but warns borrowers with older, lower mortgage offers may benefit from securing them, as several lenders have already begun increasing rates.

Value of abandoned mortgages rises a third to £32.4bn

Homebuyers abandoned £32.4bn worth of mortgages in 2025 as cancellations rose sharply, driven partly by increasing property sale fall-throughs, according to Novus Strategy.

Mortgage cancellations jumped 36.4% in value, with over 134,000 loans scrapped, while slow transaction times remain a key cause despite rising mortgage approvals.

Industry efforts are now shifting towards speeding up completions to reduce costly delays and failed purchases.