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Barclays reduces rates - reaction from brokers

ended 14. August 2023

Barclays this afternoon revealed a reduction in certain mortgage rates starting from Tuesday, August 15th, with notable decreases of 0.3% for product transfers and further advances for 2- and 5-year fixed rates up 85% loan-to-value ratio (see screengrab, below).

Considering that Barclays has now aligned with other leading lenders that adjusted their prices last week, free UK news agency, Newspage, asked brokers if this could trigger another wave of rate reductions, and if the rate war is now firmly on.

Newspage also asked brokers how pivotal the labour market and inflation data being published this week will be to lender pricing moving forwards. Their views are below.

8 responses from the Newspage community

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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Who saw this coming? It looks more and more like the bigger lenders are fighting for market position, a sure sign that they are well off their respective lending targets. The question is, with the likelihood of further base rate increases, is this a short-term window of opportunity for expiring fixed rates to soften the payment shock they have steaming towards them?
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Ben Tadd
Director at Lucra Mortgages
The mini-rate war in the residential mortgage market appears to be continuing, with the main six lenders in the market having all now slashed their fixed rate offerings. This is now likely to force smaller lenders to follow suit and drop their prices to stay in touch with the competition. This week's inflation data on Wednesday will be crucial to dictating lender pricing in the immediate future and, with further positive inflation numbers anticipated, the rate war is likely to continue apace.
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Riz Malik
Independent Financial Adviser at R3 Wealth
We appear to be in the midst of a mortgage rate rollback. We were expecting Barclays to join the other main lenders and reprice last week but better late than never. Given the release of significant economic data this week, Barclays' rate revision might prompt other lenders to reassess and possibly lower their rates further, especially if the market remains favourable. This is starting off to be another positive week for mortgage borrowers, even for those borrowing at higher loan to values.
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Justin Moy
Managing Director at EHF Mortgages
This is a belated but welcome message from one of the key high street lenders, with a number of mortgage rates reducing, especially for those borrowers with smaller deposits. Coupled with similar reductions from the Nottingham BS this afternoon, this will be a very interesting week to see if this reducing trend continues beyond the inflation figures announced. Many lenders may sit on their hands before they make any more changes, just for safety.
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Craig Fish
Director at Lodestone Mortgages
It's good to see the last of the Big 6 reduce their rates in alignment with the other lenders. But that is all this is. It is by no means a rate war, this is where the lender's rates should have been. Having realised they aren't writing enough business to survive, they had to adjust their rates accordingly. If we see some positive inflation data released this week, then I strongly suspect that we might get the first sniff of a rate war. The big question is who will be the first to jump.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
The rate war has begun amongst the lenders, and whilst this is positive news for residential customers, we believe this will usher more competitive rates in the buy-to-let market as well. The average 2Y and 5Y residential rates are the bellwether in the mortgage industry and clearly with more lenders coming forward to announce sharp cuts to rates, there is now evidence that average rates are on their way down. It certainly looks like the mortgage market has turned a corner. This will be welcome news for landlords who have in recent months been punished by extraordinarily high stress tests and eye-gouging product fees. Eventually, this is great news for the housing market because it will no doubt bring momentum back to the sluggish property sales market.
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Jamie Lennox
Director at Dimora Mortgages
It's great to see the last of the big 6 move their fixed rate pricing downwards, although it's disappointing to see how slow they’ve been to react with these reductions versus other lenders. However, now Barclays have finally shown up to the party it can really get started with further reductions across the board if another set of positive inflation data is released this week.
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
I feel calling it a price battle may be a little hasty as rates still have room to drop further and the inflation measures this week will be pivotal to see if this will continue. The Bank of England are predicting inflation to fall to 5% by the end of the year so this should bring back some confidence for lenders and reduce the knee-jerk rate rises seemingly every week. The fight to be top of the charts is welcomed and I can see this continue to happen.