While the headlines would appear to be excellent news for homebuyers in the UK, the announcement that Nationwide will as of tomorrow reduce mortgage rates by up to 0.5% is perhaps not as relevant as you may think. While there is no doubt that rates will fall tomorrow, with a four year fixed mortgage rate set to come in at 5.08% against 5.58% today, there are certain criteria which need to be adhered to.

Aside from the fact that there is a £995 fee to set-up the arrangement there is also a requirement for a 40% deposit. So while the headlines look good for UK homeowners across the country who may be looking to remortgage, or first-time buyers, how many will have a 40% deposit to hand?

Like so many mortgage providers across the UK, the Nationwide is looking to reposition itself for the eventual upturn and catch the headlines before the mass market moves. Unfortunately, the market for first-time buyers, and those without significant deposits, is still fairly unchanged and looks likely to remain this way for some time to come. Until we see an increase in liquidity across the mortgage market we are unlikely to see a prolonged and underpinned recovery in the UK property market.

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