Lenders need to “put an end” to the “phoney” rate war, The Mortgage Expert's Darryl Dhoffer has argued following recent rate reduction announcements from TSB and HSBC.
These comments come after HSBC announced 65 per cent LTV two-year fixed rates at 4.97 per cent and 65 per cent LTV five-year fixed rates at 4.53 per cent for its purchase exclusives range.
Additionally, TSB announced that two-year fixed house purchase 0-85 per cent rate and its five-year fixed house purchase are both being reduced by 0.30 percentage points.
Dhoffer said: “Once again, the biggest reductions are at the ‘safe as houses’ end of the market, namely for those with 40 per cent deposit or a similar level of equity.”
As a result, Dhoffer called for lenders to “put an end to the phoney war and drive down rates at higher loan-to-values”, as that’s the way to inject “real life” into the mortgage and property market.
He added that the market needs “less PR and more of a concerted push”.
A similar sentiment was shared by Lawson Financial director, Michelle Lawson, who said: “It is great to see the competition and the drive for lenders to attract business in the lower loan to value tiers.
“It would be even better to see this spread amongst the greater risk 90-95 per cent loan to value brackets so hopefully the confidence will continue and this will help first-time buyers get back into the market which is much needed.”
Additionally, Trinity Financial product and communications director, Aaron Strutt stated that lenders need to be offering deals “closer to 4 per cent” to get the market moving again.
Positive reaction
But the announcement was also greeted with positivity by brokers, such as Montgomery Financial director, Charles Breen, who said: “With more lenders reintroducing rates starting with a four, the housing market should pick up.”
He explained that rates will keep falling as lenders are in a “royal rumble” for market share to hit their lending targets off the back of the positive news on the base rate and inflation.
“The inescapable fact is that to make money, lenders have to lend money and it’s clear that they are competing hard to lend it,” he added.
Similar positivity was displayed by KAG Financial director, Kylie-Ann Gatecliffe, who said: “Lenders are having to be more competitive than ever to stand out right now, as the rate reductions keep rolling in.
“These latest cuts are great news for those looking to get on the ladder, move or remortgage. It has been a rocky year so it’s great to see it ending with a fiery rate war.”
Looking to the future, Gatecliffe stated that this rate war will, hopefully, continue into the new year, to allow more buyers to “bounce back with confidence of a more affordable outlook”.
Thanks to the Newspage community for sharing their thoughts with FTAdviser.
tom.dunstan@ft.com
