Santander and Skipton “shrug off” inflation data with further mortgage rate cuts

Lenders are not letting a small increase in inflation spoil the recent pattern of fixed rate cuts, with both Santander and Skipton announcing cuts this morning.

These reductions follow on from Coventry Building Society, who also cuts rates across a number of its fixed rate resident products following today’s inflation announcement.

Newspage asked brokers for their thoughts, below.

Justin Moy, managing director at EHF Mortgages:

“This is yet more evidence that lenders are shrugging off the latest inflation data and ploughing ahead with rate cuts to increase business early in 2024.

“Lenders are picking certain markets to concentrate their activity, for example, some lenders are pricing rates cheaper for home buyers whereas others are concentrating on remortgage cases.

“This is exactly why mortgage brokers are as important as ever, as we have the ability to work through the many different lenders and products to find the cheapest deal for a borrower’s needs.”

Luke Thompson, director at PAB Wealth Management:

I am still of the opinion that nearly every major lender must have failed to hit their targets last year.

“These rate cuts aren’t out of the kindness of their hearts, it’s because they are desperate to get some business through the doors in the early part of the year.

“They’ve got to keep those underwriters busy somehow. I can’t personally see the rate cuts being reversed at the minute but I do think the inflation data this morning could see a period of cooling in this mortgage price war whilst lenders take stock and potentially wait a month or so to see what is happening with inflation and whether this morning’s figures are just a blip or are part of a trend.

“Most lenders and the markets seem to have been factoring in a base rate cut in the spring but the figures this morning have made the chances of that happening much less likely.”

Ben Perks, managing director at Orchard Financial Advisers:

It’s good to see lenders continuing with the cuts they had planned prior to the CPI announcement this morning.

“They have not been discouraged and their appetite for lending is still strong.

“The volatility in rates over the past year has meant borrowers have had a torrid time so to see lenders may have priced in CPI fluctuations is encouraging. The price war continues, for now.”

Peter Stamford, mortgage expert at The Mortgage Uni:

“Borrowers rejoice, as the rate cuts haven’t stopped despite the December inflation data.

“It seems lenders are continuing to actively reduce rates early in 2024, targeting specific markets like home buying and remortgaging.

“Despite the blip in inflation, lenders continue with their rate cuts, which will boost demand for property.

“These ongoing reductions suggest an ongoing commitment to stimulate demand from borrowers rather than responding to short-term inflation changes.”

Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management:

“These rate reductions will have already been planned by both lenders, and it’s highly unlikely that these lenders in particular will reverse them.

“Especially as Coventry have already repriced once this week. I think there is still room for more rate reductions, even in light of the slight increase in inflation.

“Lenders are desperate to make up for a very subdued 2023.”

Simon Bridgland, broker and director at Release Freedom:

“It’s super to see rate cuts keep coming despite the surprise uptick in inflation. The inflation increase is clearly being perceived as a blip on a wider downwards trajectory.

“This will be welcome news for borrowers and the broader property market.”

Aaron Strutt, product and communications director at Trinity Financial:

“Lenders do not seem to be bothered about the inflation figures at the moment.

“There have been a huge amount of rate changes over the past few days, not just from the big lenders but also the smaller banks and building societies.

“Every time we think rates are likely to stabilise and will not come down any more, we get another email to say prices are getting better.

“The rate changes just keep coming, and they are unlikely to stop anytime soon.”

Amit Patel, adviser at Trinity Finance:

“Hello…. It’s Nationwide were looking for… I can see you haven’t cut your rates… We’d like to know if you’re reducing them soon… Our books are wide open… You just know what to do.”

Elliott Culley, director at Switch Mortgage Finance:

“These rate reductions were most likely planned before the news on inflation, and the funding for the latest tranche of products will reflect the rates offered.

“There may be an uptick in swap rates based on the news on inflation today, but there will be a lag before we may see any lenders repricing upwards.”