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After March inflation print, Coventry Building Society increases fixed rates across its range

Journalist: Justin Moy, Contributing Editor

ended 17. April 2024

Following this morning's lower than forecast fall in inflation, Coventry Building Society has just announced a sweeping increase to all their fixed rate products, for new and existing borrowers, residential and BTL borrowers. Newspage asked brokers for their thoughts on these increases, and how the rest of the mortgage market will react over the coming days. Their views are below.

 

8 responses from the Newspage community

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Editor
Michelle Lawson
Director at Lawson Financial
No surprises here following this morning’s inflation decrease as it wasn't as low as markets expected. More than anything we need stability but the mixed messages being sent out to borrowers remain. This appears to be the new ‘norm’ for now.
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Justin Moy
Managing Director at EHF Mortgages
This is disappointing news. Swap rate increases continue to hammer mortgage borrowers, and lenders have no choice but to pass on those higher costs. The 48-hour notice Coventry BS provides is always appreciated by brokers and borrowers, but this is just the start of another major ripple of increases that will only disappoint those coming off cheaper deals and looking to buy.
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James Bull
Mortgage Broker at JB Mortgages
It is always sad to see a lender increasing its rates and bad news for borrowers. Volatility in the mortgage market is showing no signs of slowing down.
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Peter Stokes
Director of Mortgages at Davidson Deem
Over the past week or so, swap rates have been steadily increasing, partly due to inflation figures from across the Atlantic as well as increasing tensions in the Middle East. Inflation in the UK, though falling, fell less than expected in March, and these hikes from the Coventry suggest this is already starting to filter through to higher fixed rates from lenders. If your rate is coming up for renewal, it might be better to act sooner rather than later to get the very best deal.
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Amit Patel
Adviser at Trinity Finance
Swap rates have been volatile over the past few days so lenders are monitoring their loan books to ensure they are making sufficient margins, whilst at the same time maintaining service levels by not being the cheapest lender in the market. I anticipate other lenders will announce modest rate increases over the coming days, perhaps to do with the lower than expected fallin inflation.
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Dariusz Karpowicz
Director at Albion Financial Advice
Coventry Building Society's rate hikes are the latest chapter in the current mortgage market saga, reflecting its volatility. As brokers, we're not strangers to these frequent updates — rate changes are part of the daily grind. Previously, Coventry often emerged as the most affordable option in various scenarios. With these increases, that might no longer be the case. It's a reminder of the interesting and unpredictable times we navigate in the mortgage industry. The rest of the market will likely follow suit or adjust strategies in response to these changes, as everyone tries to find their footing.
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Darryl Dhoffer
Founder at The Mortgage Geezer
The March CPI figures showed a slight decrease. However, this isn't leading lenders like Coventry BS to change course. They, along with many others, still expect interest rates to stay elevated for an extended period. Global events continue to fuel inflation, making the Bank of England's 2% target as challenging as trying to hit the moon with a rubber band. They can see the target, but for now won't reach it.
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Gary Bush
Financial Adviser at MortgageShop.com
Another head-wobbling moment for Coventry Building Society as it increases its fixed rates despite the fact that the UK inflation data showed it's slowing. God only knows what the increases would have been if the UK had mirrored the US and seen a spike in the data. This is a weird strategy being demonstrated from the Midlands.