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Santander announces further round of rate reductions

Journalist: Newspage News desk, Freelance

ended 21. August 2023

Santander has announced a further round of rate reductions of up to 0.20%, which will go live from Tuesday 22nd August. Free UK news agency, Newspage, asked brokers why lenders are reducing rates given that the base rate is expected to rise further, whether we could see reductions from other lenders and if we are now in a mortgage price war. Their views (and a screengrab of announcement) are below.

9 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
It's excellent news to see further lender rate reductions on the back of the recent inflation and wage data. It shows that the lender rate war is still ongoing to the benefit of all homeowners. Crucially, it also highlights that lenders still have market confidence even with another likely Bank of England base rate hike at the next meeting.
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Ashley Thomas
Director at Magni Finance
Though this is welcome news, the mortgage market remains highly uncertain and volatile. Inflation has come down but this was expected. I expect to see more lenders look to reduce their rates as they increased them significantly in the past two months or so. Perhaps what we're seeing is a reaction to an over-reaction.
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Jamie Lennox
Director at Dimora Mortgages
It's great to see another Big 6 lender return with further rate reductions despite plenty of uncertainty remaining around core inflation and how high the base rate may still need to go. We may see other lenders follow suit. Mortgage lending has slowed noticeably over the summer holidays and we could see more lenders fight it out to gain market share from a reduced pool of people seeking mortgages.
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Justin Moy
Managing Director at EHF Mortgages
This is a welcome move from Santander, especially when some smaller lenders have actually increased their rates over the past few days. Lenders are still looking to grab some market share. Santander is also passing on some savings to existing borrowers, too, to retain their clients. Everything is uncertain at the moment. It's hard to predict how any of the main lenders will react, but this might keep them on their toes for a little while longer.
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Ranald Mitchell
Director at Charwin Mortgages
The fight continues for market share and it's worth noting that buy-to-let rates are dropping too. With so many landlords being hammered, perhaps Santander sees an opportunity to grow their share of the market with property investors. Either way, rate decreases are great news for everyone and underline how mortgage lending targets remain way off course as demand for higher interest borrowing is low.
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Mike Staton
Director at Staton Mortgages
We will continue to see rate reductions until the next announcement made by the Bank of England. Lenders are desperate to claw back missed mortgage opportunities over the previous year due to overcautiousness because of the economic situation we find ourselves in. We may see further withdrawals of products closer to the announcement of the BOE base rate, especially if inflation fails to continue dropping. At the moment these rate reductions are as much about corporate high-fiving whilst the majority of the general public are still struggling to keep a roof over their head and food on the table.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Lenders are still trying to attract new business by cutting rates for borrowers, but this won't last. Whilst new lending has nearly dried up, lenders have the appetite to take on borrowers with little margin in their pricing, but with inflation staying high and a central bank more likely to increase rates rather than cut them, rates won't continue to be cut for much longer. Until the Bank of England starts cutting rates, which should be later this year, borrowers face uncertainty around which direction the cost of borrowing money will go.
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Darryl Dhoffer
Founder at The Mortgage Geezer
You can only commend lenders' action on the rate reductions we're currently seeing. You get the impression that escalated rates over the past 8 weeks have been reactive, and we are now seeing similar rate reductions. It will be interesting to see how long these rate reductions carry on for. I suggest make hay while the sun shines, as next month could be a lot different.
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Ben Tadd
Director at Lucra Mortgages
This is further positive news for the mortgage market in what is a very uncertain period. Following recent wage price growth and inflation data, which have created new concerns about further base rate rises, Santander has ensured the rate war we have witnessed over the last 3-4 weeks will continue, for now at least. It will be interesting to now see how the other big six lenders react this week with their pricing strategies.