Gov’t Stake in NatWest Falls Below 1% – Big Shift for UK Banks

The UK government has reduced its ownership in NatWest to under 1%, bringing the bank closer to full privatisation for the first time since the 2008 financial crisis. This strategic exit may have lasting impacts on how banks approach lending, pricing, and borrower assessments — especially as competition tightens in the mortgage market.

With the state set to fully exit NatWest by 2025–26, this update signals a shift in banking policy, independence, and risk appetite. For homebuyers, remortgagers, and investors, this could mark the beginning of a new chapter in how major high street lenders operate.

On Wednesday, the Treasury confirmed the sale of another tranche of NatWest shares, reducing the taxpayer’s stake from 1.98% to just 0.90%. This is the lowest level since the government took control in 2008, when it acquired an 84% stake after injecting £45.5 billion to stabilise the bank.

Since December, the government’s ownership has fallen by more than two-thirds. Chancellor Rachel Reeves has confirmed that the exit will be completed by the end of the 2025–26 financial year.

Plans for a high-profile public share offer were scrapped last September. Instead, shares are now being sold gradually to institutional investors, with the Treasury citing better value for money.

While the share sale may seem distant from day-to-day mortgage decisions, it holds weight. As NatWest moves closer to full independence, it may adjust its approach to lending, affordability assessments, and product innovation — with a renewed focus on profitability and private shareholder expectations.

In the past year, key milestones included the government’s share falling below 30% in March 2024 (ending its status as a controlling shareholder), and below 20% by July (removing its related-party designation).

Without state oversight, NatWest could take bolder steps in how it prices mortgages or sets lending criteria — potentially tightening policies for certain borrower groups, or expanding flexibility depending on market conditions. For UK borrowers, this makes it more important than ever to shop around and seek expert advice.

At Mortgage-Tek, we track market changes like this closely. Whether you’re a first-time buyer, moving home, or remortgaging, our specialists are here to help you understand how broader banking decisions may impact your mortgage choices — and what steps to take next to protect your budget.