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Virgin and Clydesdale reduce SVRs by 0.25%: "This reduction is a strong signal that lenders are pricing in a base rate cut soon"

Journalist: Justin Moy, Contributing Editor

ended 11. July 2024

Virgin and Clydesdale Bank have today announced a 0.25% reduction to their Standard Variable Rates, from the 11th July, which could be read as a precursor to a potential base rate cut in the next few weeks. Newspage asked brokers for their views, below.

9 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
This is a positive move, yet it still leaves their SVR nearly 1% higher than most of the high street banks. What it does suggest is that lenders believe a base rate cut is on the horizon. The second half of the year is looking to be as exciting as the semi-final match last night.
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Justin Moy
Managing Director at EHF Mortgages
This is a very interesting move by Virgin Money and Clydesdale Bank. Standard Variable Rates have traditionally been very expensive and the recent higher base rate has pushed many in excess of 9%. This reduction is a strong signal that lenders are pricing in a base rate cut soon, likely of 0.25%. However there is plenty of scope to reduce without losing too much profit, given only a small set of borrowers will benefit directly.
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Ken James
Director at Contractor Mortgage Services
While lenders can make variable rate cuts when they want, it is very unusual for them to do so without there being a base rate change, so this move does suggest they feel one is coming. Is this the Labour effect and would this still have happened if the Conservatives where still in power? We will never know but what we do know is that lenders are starting to make real moves to secure business.
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Darryl Dhoffer
Founder at The Mortgage Geezer
These are some of the highest SVRs in the marketplace, particularly for a high street lender such as Virgin Money, so the cut is welcome. It may be that this is more of a regulatory alignment, as opposed to any movement, or predicted movement, in the Bank Of England base rate.
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Craig Fish
Director at Lodestone Mortgages
Though this lender's SVR is outrageously high, and will continue to be even after the reduction, it is a good sign that there may be a base rate cut around the corner. If others lender follow suit it will be all round good news, but I fear that this is just Virgin trying to bring themselves into line with other lenders. They need to try harder.
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Michelle Lawson
Director at Lawson Financial
Having a Standard Variable Rate at nearly 10% is the top end of the market in comparison to other lenders, so Virgin and Clydesdale reducing is a positive sign. This will affect a small percentage of their business but is good news for those concerned and looks like a Bank of England base rate cut is being priced in ahead of 1st August decision. After the England win last night, is the feel-good factor about to return?
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Simon Bridgland
Director at Charwin Private Clients
Virgin and Clydesdale could both be applauded for reducing their standard variable rates, but should they have ever been this high? SVRs are controlled by the lender rather than following an index such as the Bank of England base rate, which is seen as a fairer way of running a standard variable rate. Virgin and Clydesdale’s variable rates are way above many other lenders, so it could be said that it was about time. Managed rates catch borrowers who are either unable or reluctant to change lender or update their interest rate or even those blissfully unaware of their ability to change to a new deal. I don’t feel any lender should have managed rates, especially with Consumer Duty being front and foremost in any products development.
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Dariusz Karpowicz
Director at Albion Financial Advice
This is another piece of positive news from the market and major lenders. The 0.25% reduction by Virgin and Clydesdale Bank is definitely a step in the right direction. With Standard Variable Rates over 9%, they are still extremely high compared to the rates we were used to after 2009. However, this move could be an indicator of a potential base rate cut in the near future. It's encouraging to see such positive changes and improvements in the mortgage product market over the last few weeks. This trend may continue, offering more relief to borrowers.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
A pointless move given that neither rate is one that any borrower would want to be on unless they perhaps have a pending sale going through and avoiding a new tie-in. I would say there is plenty of margin in this Standard Variable Rate without this being an indication of or based on any presumed base rate reduction.