Following the Bank of England’s decision to hold the base rate steady last week, a number of major banks such as HSBC, Barclays, and NatWest introduced reductions to their mortgage rates.
HSBC and Barclays introduced significant rate cuts across their fixed-rate mortgage products, while NatWest has reduced rates on several of its existing deals.
In light of this positive trend, Newspage asked brokers to share their thoughts as to whether this move is part of a broader trend aimed at attracting new borrowers and supporting existing customers back to the market, or if turbulent times are still ahead.
Reaction:
Ranald Mitchell, director at Charwin Private Clients:
“Exciting developments are on the horizon as major market players slash rates, potentially igniting a rate war reminiscent of the surge we witnessed in January.
“After a year of market stagnation and mounting frustration for brokers and consumers alike, this could be the long-awaited breakthrough.
“With the 2% inflation target finally achieved, the end of a challenging period is in sight. Get ready, because the property market is poised for a remarkable and overdue resurgence.”
Simon Bridgland, broker and director at Release Freedom:
“This weeks rate drops I feel could have legs to last until the election results are in, hopefully the drop in swap rates won’t be too short lived.
“In the short term and with the market feeling further confidence, we should see other lenders join in over the coming week bringing rates across the board to a more attractive level for borrowers juggling with remortgages and product transfers, not just for purchase products.”
Rohit Kohli, director at The Mortgage Stop:
“If the last two years have taught us anything, it’s that anything could happen.
“Whilst rates are reduced, this could be reversed at the drop of a hat.
“With elections to be decided here at home, snap elections in France, and a long, drawn-out campaign in the US, a stable political environment isn’t anywhere close to being delivered.
“Inflation, despite being at 2%, is still not fully under control with a real risk it could rise again. So whilst the latest round of reductions is very welcome, it’s crucial to remain cautious.
“The reductions by NatWest, Barclays, and HSBC might indicate the beginning of a broader trend, but given the volatility of the current global economic and political landscape, it’s too early to say definitively.
“Time will tell if this is a lasting change or just a temporary adjustment in the market.”
Craig Fish, director at Lodestone Mortgages & Protection:
“At this stage this is just lenders reacting to the reducing swap rates, and looking for a bit of market share after what has been an extremely slow start to 2024.
“If we see positivity following the general election result, swiftly followed by more positive inflation data and a reduction in the Bank of England base rate then this downward trend is likely to continue.”
Michelle Lawson, director at Lawson Financial:
“Swaps are coming down as temperatures are rising.
“Hot deals are hopefully on the return for borrowers as shown by the reductions so far which is much needed and long overdue.
“Only time will tell if this is temporary or the start of good things to come.”
Dariusz Karpowicz, director at Albion Financial Advice:
“While these are encouraging signs, they are only small adjustments based on minor changes in swap rates.
“The big question is whether this marks the beginning of a broader trend or just another false dawn.
“Unfortunately, there’s still a lot of uncertainty in the air.
“With the upcoming election, fluctuating house prices, and ongoing geopolitical troubles, it’s unlikely we’ll see significant rate decreases anytime soon.
“These small rate drops are a glimmer of hope, but they don’t signal a major shift just yet.
“Borrowers should remain cautious and stay informed, as the market is still quite volatile.
“In the meantime, these rate reductions provide some relief, but we’re not out of the woods.
“It’s a step in the right direction, but don’t hold your breath for a dramatic plunge in mortgage rates just yet.
“Let’s keep our fingers crossed for more stability and positive changes ahead.”
Jack Tutton, director at SJ Mortgages:
“With the election on the horizon, I think most lenders what to see the outcome and how markets react to this before making wholesale reductions.
“We have, however, seen lending rates fall significantly in the past month which reflects some of the reductions we’ve seen, I don’t believe this will be a common occurrence until after 4th July.”
Adam Stiles, managing director at Helix Financial Partners:
“The outcome of the General Election will have a direct correlation to what happens to rates.
“As long as the expected happens, which seems an almost foregone conclusion, we would expect markets to behave and maintain some stability.
“We suspect the lenders have already priced in some volatility too.”
David Stirling, independent financial adviser at Mint Mortgages & Protection:
“Finally this looks like some relief for consumers with hopefully more lenders going to join the gold rush and get the property market moving for the rest of 2024.
“With the Bank of England rate cuts expected in August after the general election we can hopefully expect even more competitive rates to pump up borrowing and property transactions in the autumn.”
Hannah Bashford, director at Model Financial Solutions:
“I am cautiously optimistic. Inflation has gone in the right direction and there seems to be a fore gone conclusion to the winner of the upcoming general election, so that should bring some stability to the market.
“With the Bank of England predicted to make their first cut to the base rate in August we should see more lenders reducing their rates in the coming weeks, which will be very welcome news for borrowers.”
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions:
“Three major lenders reducing their rates could be encouraging signs.
“Only time will tell if other lenders will follow suit, marking a lasting shift, or if this is merely a temporary adjustment much like the British weather.”
