Banco Sabadell explores TSB sale

Banco Sabadell, owner of TSB, is considering selling the UK lender a decade after its acquisition, having received preliminary interest from potential buyers. This move aims to raise funds amid Sabadell’s ongoing battle against an €11bn takeover attempt by rival BBVA.

TSB, which holds £34bn in mortgages and serves around five million customers, reported a pre-tax profit of £285m in 2024. The potential sale could fetch between £1.7bn and £2bn. Meanwhile, Metro Bank has also attracted takeover interest from private equity, signalling possible consolidation in the specialist mortgage sector.

Former Metro heads breached rules on £7.4bn mortgage package

Former Metro Bank leaders Craig Donaldson and David Arden were found by the Upper Tribunal to have “knowingly” breached listing rules by misrepresenting mortgage assets in a 2018 trading statement, confirming an earlier FCA decision.

The bank overstated risk-weighted assets on commercial loans, misleading the market and contributing to a 39% share price fall when corrected figures emerged. Metro Bank was fined £10m, with Donaldson and Arden fined £223,100 and £134,600 respectively, and both have 14 days to appeal.

This ruling comes as private equity firm Pollen Street Capital shows takeover interest in the lender, now valued around £850m—significantly below its £3.5bn peak in 2018.

Reeves to set out 10-year multi-billion homes and infrastructure plan

Labour is set to launch a £725bn, 10-year infrastructure plan aimed at transforming the UK’s homes, transport, hospitals, and schools. Chancellor Rachel Reeves outlined four priorities: upgrading transport networks, tackling the housing crisis with more affordable homes, modernising public services, and accelerating the clean energy transition.

The plan seeks to attract private investment and bring stability to capital spending. Following last week’s spending review, which included £113bn for capital projects and £39bn for social housing, the government also created a new authority to improve delivery of infrastructure supporting 1.5 million new homes over five years.

Metro Bank receives private equity takeover approach: Reports

Metro Bank is in early talks with private equity firm Pollen Street Capital about a potential takeover, which could trigger consolidation in the specialist mortgage sector and see Metro lose its stock market listing.

Pollen Street, which holds stakes in Shawbrook Bank and other financial services firms, might facilitate a deal between Metro and Shawbrook, despite Metro rejecting a previous bid from Shawbrook in 2023.

Metro’s shares rose 13% to a valuation of £853m, roughly half its peak value. The bank, the UK’s first new high street bank since 2010, has faced regulatory troubles and was rescued in 2023 by a £925m deal led by billionaire Jaime Gilinski Bacal, who now controls over half the company.

BTL lenders reassess low-rated EPC homes ahead of green rules: Cotality

Buy-to-let lenders are reassessing their mortgage strategies to reduce exposure to properties with poor energy efficiency ahead of government net zero rules requiring all private rented homes to achieve at least an EPC band C rating by 2028 for new tenancies and by 2030 for all.

A study by Cotality found lenders are increasingly factoring in environmental data—such as smart meter and weather information—to inform decisions, though many still lack consistent access.

This shift could disadvantage landlords with lower-rated properties, while competition intensifies for energy-efficient homes. Lenders warn that without robust data, meeting net zero goals will be challenging and require industry-wide cooperation.

National Housing Bank launched to fund half a million new homes

Labour has unveiled plans for a publicly owned National Housing Bank, backed by £16bn of taxpayer funding and £6bn in existing finance, aiming to unlock over £53bn in private investment to support the delivery of over half a million new homes.

A subsidiary of Homes England, the bank will offer debt, equity, and guarantees to help developers—especially smaller firms—access finance for complex or large-scale projects. It will also support regeneration schemes in partnership with local leaders and mayors.

The initiative forms part of Labour’s wider goal to build 1.5 million homes over five years and sits alongside a broader £725bn infrastructure plan due to be announced.

UK inflation held at 3.4% in May: ONS

UK inflation held steady at 3.4% in May, with falling transport costs offset by rising food and household goods prices, according to the ONS.

Economists suggest inflation remains too high to justify further reductions just yet, while mortgage rates remain unpredictable, with lenders offering slight cuts despite market uncertainty. Industry figures say the housing and savings markets face ambiguity, but flexible mortgage products and strong lender appetite continue to offer opportunities for borrowers.

MPC decision: Base rate held at 4.25%

The Bank of England has kept the base rate steady at 4.25%, with the Monetary Policy Committee voting 6-3 in favour of holding, while three members preferred a 0.25 percentage point cut to 4%. The decision follows a May cut from 4.5% to 4.25% amid ongoing inflation risks.

The MPC noted persistent two-sided inflation risks and advocated a cautious approach to withdrawing monetary restraint. Inflation held at 3.4% in May, and economists expect the committee to monitor labour market data closely before considering further cuts, with two 25bps reductions forecast for August and November. Mortgage market reactions are awaited.

Rental demand cools as tenants join homeowning ranks

Rental demand in the UK is easing as more tenants become homeowners, with tenant registrations down 17% year-on-year and 28% below 2019 levels, according to Hamptons.

Falling mortgage rates have made buying more affordable than renting for many first-time buyers, especially those with deposits of 10% or more. Rental supply has risen slightly, while rental growth has slowed to 1.5% annually, close to long-term averages, with rents falling in London but rising in the North and Midlands. Landlords remain cautious amid political uncertainty, particularly regarding the upcoming Renters’ Rights Bill.

Halifax cuts rates, including 2-year fix at sub-4%

Halifax has reduced rates on several homebuyer and remortgage deals, including a sub-4% two-year fixed rate now at 3.94% for up to 60% LTV with a £999 fee.

The lender also cut its five-year fixed rates by 0.21%, with a no-fee option starting at 4.38% up to 80% LTV and a £999 fee deal from 4.27%. Additionally, the two-year fixed rate for 90% and 95% LTV without fees has been lowered by 0.19% to 5.15%.