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Barclays, TSB and others hike rates: "Rising mortgage rates are sucking the energy out of the property market"

Journalist: Justin Moy, Contributing Editor

ended 13. June 2024

A number of major mortgage lenders have announced rate increases this morning, as we hit the half-way point in the election campaign. Barclays have increased a number of deals by 0.15%, TSB has increased rates across their residential and BTL ranges by up to 0.35% (including Existing Client products), while smaller increases by Leeds BS and Clydesdale Bank were also announced by 10am this morning. Newspage asked brokers for their views on the changes, below.

7 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
It feels like one lender has blinked and the rest have followed. Money markets haven't increased excessively in the last week or so, in fact longer swap rates have fallen, so these increases may reflect activity from the end of last week. At a typically busy time for home buyers, higher mortgage rates are the last thing borrowers and the property market need. The year started on a high but now the mortgage and property market, much like the weather, is unseasonally bad.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
Rising mortgage rates are sucking the energy out of the property market. This is certainly not the direction of travel we had anticipated for this stage in the year. It’s looking ever more likely that the base rate will hold next week and that the outlook for borrowers will be roughly as bright as the UK summer.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Wage growth data proving sticky this week means there is not huge confidence in a base rate reduction in the early summer. As a result, some lenders are playing it safe by slightly increasing rates. There is also an element of lenders managing levels of new business through these adjustments as some are struggling with demand for their products and managing to service the level of applications. Nothing that has been said in any of the election debates so far has given us much confidence in the direction of travel for the economy. The mortgage and property market appear to be drifting aimlessy right now.
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Ben Perks
Managing Director at Orchard Financial Advisers
Rates are climbing as the campaign nears completion. There is a glimmer of hope, though, as swap rates appear to be reducing. This could mean some better deals in the weeks to come once this latest tranche of funds is gone and new money brought in. This should mean that cheaper deals are on the way, which will be a huge relief for families that are struggling to pay for Sky TV, which it can be traumatic to go without, can’t it Rishi?
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Dariusz Karpowicz
Director at Albion Financial Advice
This might come from the uncertainty about not only the outcome of the election but also the lack of major policies announced relating to the housing market. It seems like the topic is taking a backseat to discussions about potholes and whether Sky TV is affordable. Uncertainty always has a negative effect on markets. This mid-election campaign rate hike indicates that lenders are bracing for potential economic shifts and instability. Borrowers are caught in the crossfire of political and economic uncertainty, making it crucial to stay informed and agile in managing their mortgage decisions. Let's hope for some clarity and positive movement in the coming weeks to steady the market.
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Simon Bridgland
Director at Charwin Private Clients
The speed of lenders ratcheting up interest rates can sometime take your breath away. Businesses need to make a profit, of course, but maintaining profit margins on speculation, at such a pace, is enough to spook your typical mortgage holder. With household budgets being eaten up at such a pace, it makes my dog eating a slice of ham look glacial. Even with inflation a nudge over 2% now, people are still reeling from the pain of the past four years, which of course has not gone away. Advisers should be reassuring their clients not to hit panic, but to be realistic in what they can afford, as the current rate world is much more normal than many homeowners understand.
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Elliott Culley
Director at Switch Mortgage Finance
Whenever there is an increase or decrease in SWAP rates, there is always a lag before these changes are reflected in the mortgages rates on offer. No doubt since February mortgage lenders have been more cautious before reducing rates as the economic uncertainty continues. An election campaign add further fuel to the uncertainty and it is no surprise to see lenders being cautious.