Lenders slashing rates
How has lenders slashing rates impacted business?
Are you seeing a rise in remortgage business?
What are you advising clients at present?
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8 responses from the Newspage communityCopy all
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The rate reductions and media coverage of this has increased enquiries and this is down to growing confidence. The lower monthly payments are seeing people reignite the house-buying plans they had recently put on ice. We are, as all good brokers are, revisiting clients with secured rates, where there are now savings to be had and re-broking those before completion to take full advantage of the current rate-war, especially when it could flip again should this week's inflation figures not be as good as predicted.
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It was inevitable that lenders were going to start reducing rates however "slashing" is a little extreme. They have been hiked up in a panic caused by the government & BOE being so secretive about their intentions, they wouldn't have looked out of place in a James Bond movie. The release of good news once again stimulates the market and puts people at ease, one would think that the Government and BOE are trying to control the population with fear by keeping everybody in the dark so often.
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Mortgage rates are coming down, albeit slower than they went up. The swaps market is slowly reducing but the whole situation is quite volatile. Anyone who can remortgage right now I am advising to secure a rate now and take advantage of rates reducing. Business won't fully pick up until we see lower rates than we are currently seeing. Data shows when rates start with a 4, the market is stronger so until rates fall to this level, we will see clients still put off by the current rates.
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Here is our view as a portfolio landlord remortgaging several properties at the moment. In what appears to be a harmonious symphony, major lenders including Santander, Halifax, NatWest, HSBC, First Direct and TSB are orchestrating a reduction in fixed mortgage rates. This will no doubt improve affordability for aspiring homeowners, which is great to see. With imminent rate cuts, the housing market is poised for another exciting time over the next 6-12 months. The allure of lower borrowing costs is expected to encourage potential buyers, both homeowners and landlords alike. Mortgage rates across these major lenders are falling by nearly 70 basis points, making property ownership that much more accessible to a broader demographic. We remain cautiously optimistic, hoping that this trend marks the start of a period of favourable mortgage rates. However, while the market takes a sigh of relief, all eyes are now on next week's inflation data and how the Bank of England responds to that.
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I'm not sure 'slashing' rates is the term I'd use. Don't get me wrong, I'm all for rates coming down but as of yet they're yet to match the level of increases we've seen in the last 6-weeks or so. Our business is heavily remortgage-focused right now, with a few purchases thrown in, but nowhere near the usual volume of purchase business. We're already signing up people due to remortgage in Feb/Mar 2024 to help them avoid things worsening between now and then.
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Whilst rates coming down is always good news, we do need to remember that they have only dropped from "very high" to "still quite high" in terms of people's experience of interest rates over the past few years. In reality, these rates are at, or around, the levels we saw before the financial crisis in 2008. So the real question isn't "when will they return to normal" but "is this a return to normal"?
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I wouldn't exactly agree that lenders are 'slashing interest rates', some lenders have dropped their rates but for many lenders, the rates on offer are still higher than 4 weeks ago and in comparison, some lender's rates are nearly 2% higher than they were 2-3 months ago.
I'm not seeing a rise in remortgage cases as most clients we have been in contact with 6 months prior to the current mortgage ending.
I'm not seeing a rise in remortgage cases as most clients we have been in contact with 6 months prior to the current mortgage ending.
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A traditional tumbleweed month, August has been unusually busy with lots of enquiries as the narrative has shifted to one of rates getting a bit more palatable rather than some sort of impending apocalypse. Yes there are lots of remortgage enquiries about but it feels like a bumper September is brewing with lots of available stock, more reasonable prices and hungry homemovers. We anticipate a very busy September indeed.