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Gen H increases rates - reaction from brokers

Journalist: Justin Moy, Contributing Editor

ended 05. January 2024

Gen H, the first lender to launch sub-4% mortgage deals just before Christmas, are increasing the rates on their headline deals. Newspage asked brokers why they are hiking when other lenders are cutting. Their thoughts are below.

 

9 responses from the Newspage community

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Editor
Justin Moy
Managing Director at EHF Mortgages
Gen H are not a huge mortgage lender compared to the High Street providers, so their abilty to keep these very competitive rates going for the past few weeks has been very impressive. But I guess it couldn't last much longer. Whenever a mortgage lender suffers an avalanche of applications, rate increases are a natural defence to slow down their popularity. It's not necessarily a sign of any pricing issues. Time for the rest of the market to share the load and bring cheaper deals for all borrowers.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Sometimes your rates put you too far out front and leave you exposed to attracting more applications than you envisioned, which has been the case here for Gen H. So this rate increase is just to sink back into the pack somewhat to reduce the flow of applications so that service levels and funding don't become challenged.
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Matthew Jackson
Director at Mint FS
Credit has to go to Gen H for sticking their head above the parapet and being the first lender to go sub 4%. The not-unexpected reaction from brokers has been to pile business into them and being a smaller lender this pushes their service standards to the limit. I am sure they expected other lenders to move faster to match them which would then spread the applications, but unfortunately, a lot of the high street names have been slow off the mark, perhaps suffering from a new year hangover of sorts. Hopefully, this is temporary and once service levels are restored at Gen H they can reprice accordingly.
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Gareth Davies
Director at South Coast Mortgage Services
I wouldn't read much into this other than the fact they are managing their business and service levels. By their own admission, they're not one of the 'big boys' and need to tweak rates to accommodate application levels frequently. I certainly don't see this move causing other lenders to do similar.
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Rohit Kohli
Director at The Mortgage Stop
Gen H led the way before Christmas and have been near the top of sourcing for a while. Given their funding model and scale it's no surprise that they would want to ease the pressure on themselves as they are genuinely one of the lenders who try to maintain service levels.
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Jack Tutton
Director at SJ Mortgages
This was always likely to happen given Gen H were the first lender to offer a product under 4%. They would have been inundated with applications even in what is generally a quieter time over the Christmas period. The increase in SWAP rates that we have also seen since the start of the year will not be helping matters either. Several larger lenders have since followed Gen H's lead by offering sub-4 % products. It will be interesting to see how long they hold at these rates if SWAP rates continue to increase.
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Darryl Dhoffer
Founder at The Mortgage Geezer
While the big banks lumbered and debated interest rate decreases, Gen-H offered sub 4% interest rates just before the Christmas break. Its secret weapon? Well, some may argue, that a smaller lender may be suffering from the deluge of applications, but this may be down to operational control, and monitoring the flow of applications effectively, as opposed to an Everest of applications that have landed on their desks - this is just tweaking the tap for applications. That said SWAP rates have marginally increased since the turn of the year, so Gen-H have repriced accordingly.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
Gen H took a punt and have benefitted from first mover advantage in stimulating new business. A slight adjustment in rates to quell demand isn’t a big deal, especially as other lenders are now offering more competitive deals. It’s good for borrowers and great for brokers.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Looking at swap rates this morning, it would seem to confirm the Gen H line about market conditions; swap rates have increased across the board from their levels just a day or so ago. The rise is only small, but does this signal an end to the current rate reductions? Are we seeing a leveling out of the market?