Barclays is set to implement changes to its mortgage product rates, a move that will take effect from Tuesday, 23rd April.
This change comes as a number of lenders have started to reprice as SWAP rates increase and the likelihood of a base rate cut becomes more remote.
The move will involve modifications to a range of products within the Residential Purchase, Residential Remortgage, and Reward categories.
Free news agency Newspage asked brokers for their take.
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Justin Moy, managing director at EHF Mortgages:
“This second price increase by Barclays in less than 7 days just shows how fragile our market is. with lower expectations for base rate cuts, the cost of oil and imports escalating, this is going to be a difficult few months for borrowers and home buyers to navigate. Inflation is not the only factor when setting rates as we know, but the influence of worldwide issues has rapidly influenced recent Swap rates.”
Ying Tan, CEO at Habito:
“Lenders are responding quickly and decisively to rising swap rates, providing a body blow to homeowners and first-time buyers. Base rate cuts look less likely in the near term, however, it is important to remember that the medium to longer-term outlook for rates is still positive and on a downward trajectory. It’s never been more important to seek mortgage advice.”
Richard Jennings CeMAP, founder & managing director at Richard Jennings Mortgage Services:
“More rate rises again this week show the continued uncertainty across the mortgage market. The biggest question we face as brokers is “Are rates going to rise or fall?” The reality is the outlook for this depends on the day of the week and which economist you listen to. Do what is right for you, at the present moment in time as there is too much uncertainty, and economic matters out of your control, to try and play the markets.”
Darryl Dhoffer, adviser at The Mortgage Expert:
“Sweeping increases now from Barclays, launching quicker than a greyhound out of the traps – with two rises in the space of the last couple of weeks from this lender, sadly other lenders may follow suit. Predictions of stability in the market, and potential drops in the Bank Of England base rate, may be premature.”
Ranald Mitchell, director at Charwin Private Clients:
“Barclays have always been a reliable barometer in the mortgage world, and raising rates in the manner they have, indicates disorder in the financial markets. Turbulent times are here, and with a base rate cut increasingly unlikely until autumn, mortgage seekers are in for a summer of continued agitation.”
Gary Bush, financial adviser at MortgageShop.com:
“Heartbreaking news for existing mortgage customers as they increase their rates twice in the past week – destroying any chances they might have of renewing their current mortgage rate with them. With no real data to confirm why UK lenders are in disarray at the moment with some decreasing rates while others increase.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“To increase your rates twice in a week really fuels uncertainty in the market which is far from helpful. The market is heading into a storm presently and there will be untold damage before we make it out the other side.”
Dariusz Karpowicz, director at Albion Financial Advice:
“Barclays’ double rate increase within a week is a stark reflection of the current market volatility. Unfortunately, they’re not alone, as many major lenders are responding to rising swap rates by adjusting their pricing upwards. This trend highlights the immediate impact of market fluctuations on the mortgage industry, with lenders swiftly passing on the cost to borrowers. These moves underscore the need for potential homeowners to review their financial plans carefully in light of these changes.”
Elliott Culley, director at Switch Mortgage Finance:
“The increase in SWAP rates has begun to filter through. Although this 2nd rate increase is likely down to business levels increasing at Barclays and a underestimation of their intial rate increases meant they were still competitive. Barclays have made some positive criteria changes recently which have most likely increased the number of applications.”
Rohit Kohli, director at The Mortgage Stop:
“Barclays increasing rates twice in the space of 7 days underlines how we are nowhere near out of the woods yet. Reading some of the analyst’s comments and looking at how lenders are currently repricing it certainly looks like rates will remain higher for longer which will be a crushing blow to many.”
Akhil Mair, director at Our Mortgage Broker:
“Barclays’ second rate hike in a week really highlights the volatility in the mortgage market right now. It’s essential for anyone with a mortgage or looking to buy to stay well-informed and consider options like fixed rates to protect themselves from these fluctuations. Is now the time the government and Bank of England step in to help?”
Ben Perks, Managing Director at Orchard Financial Advisers commented:
“It’s blow after blow for borrowers. There is a huge amount of uncertainty with rates and swap rates have been creeping up over the last week or so. But two rate increases within a week just seem like poor planning. They need to provide more stability for customers who want to take a couple of days to consider options. For the vast majority, a mortgage payment is the largest monthly outgoing so we can’t have a ‘blink and you miss it’ approach to rates.”
Tracey Dixon, broker at Pure Mortgage and Protection:
“Barclays’ recent rate hikes, two within a week, definitely illustrate the impact of market uncertainty on the mortgage industry. These rapid rate increases can be unsettling for potential borrowers who are looking to lock in rates or enter the housing market. It can also create some instability for lenders who have to navigate a quickly changing interest rate environment. Not all Lenders Move in Sync: While Barclays has raised rates, it doesn’t necessarily mean all lenders will follow suit immediately. It’s still wise to shop around for the best rates.”
Michelle Lawson, director at Lawson Financial:
“The painful times of flip-flopping in the mortgage world seem to be returning. Products here one minute and gone the next. Borrowers just need to act quickly and secure something.”
Scott Taylor-Barr, principal adviser at Barnsdale Financial Management:
“We’re all in danger of being busy fools, as sadly, this now appears to be the new working model of many lenders: frequent and often very small rate changes. This creates a lot of extra work for all involved and promotes a sense of unease amongst borrowers, which often leads them to delay decisions, helping no one.”
