The remaining 95percent must be funded with a self-build mortgage from a lender registered with the scheme, which is offered by Homes England. Currently pegged at 1.25percent, some forecasters are suggesting that interest rates will rise to 1.75percent when the Bank of England announces its next decision on Thursday.

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Keystone Property Finance, the specialist buy-to-let lender, has cut selected two-year fixed rates by 0.1 percentage points. The chunkiest cuts will be on two and five-year fixed rates for residential remortgage.

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