Price war will not last forever, say lenders
17 September 2015
The current mortgage price war amongst mainstream mortgage lenders will not last forever, according to lenders taking part in a panel debate at today’s Financial Services Expo (FSE) London in Old Billingsgate,
When discussing the series of pricing cuts made across the board by many mainstream lenders recently, the consensus appeared to be that this was unsustainable. Louisa Sedgwick of Leeds Building Society said: “The price war won’t continue forever; there is likely to be a jockeying for position throughout the rest of the year however we’ll see some rate rises at the start of next year. I don’t see it [ongoing price cuts] lasting beyond this year.”
Members of the panel were also unanimous in their contention that Bank Base Rate would rise in 2016 and this would clearly impact on mortgage pricing.
“I expect to see a small 0.1% increase in BBR at the start of next year,” said Roger Morris of Precise Mortgages. “However I think there will be a sustained low interest rate for many years to come – I expect it to only have reached 2% by 2020.”
Ian Andrews of Nationwide Building Society felt the increase would be larger. “We anticipate a 0.25% rise in Q1 2016 and possibly another rise at the end of the 2016,” he said. “I think it will be sensibly planned.”
Pat Bunton of London & Country highlighted how comments made by the Governor of the Bank of England, Mark Carney, had had a positive impact for the broker community especially when he signalled a BBR rise sooner rather than later. “[A rise] is a big opportunity for the intermediary community,” he said. “Carney’s comments earlier in the summer brought about an increase in remortgage action and the normal August dip didn’t happen.”
FSE London is taking place today at Old Billingsgate in the heart of London’s Square Mile. Alongside the seminar sessions it will offer delegates access to a range of lenders, providers and distributors actively looking to build relationships with the adviser community. Over 70 exhibitors will appear including lenders such as Accord, Lloyds Banking Group, Halifax Intermediaries, Santander for Intermediaries, Skipton Building Society, Virgin Money, and many more.
