As cheaper deals become more viable, a ‘price war’ has broken out between the larger lenders to attract the significant pent-up demand in the home buying market. We’re now seeing sub-4% deals available among the major banks, with new offers frequently emerging that dethrone the ‘cheapest’ deal. 

Even before the rate cut, property transactions had been increasing significantly as market conditions improved, intensifying the pressure of larger banks to compete. 

The benefits of the rate cut extend to those refinancing, such as those exiting two-year deals, even if rates are higher now than when they originally fixed. Further drops in rates, more competition, and greater choice mean market conditions are better than a few months ago when they may have originally been looking to renew.

Additionally, the price war is leading to firms reducing their fees and offering cashback incentives, making it increasingly a buyers’ market. 

 

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More capacity and a tailored lending approach 

While these lower rates are good news for those looking to purchase property, customers are often demanding greater levels of local expertise and specialisation. 

That is certainly the case with Nomo’s customers – potential buyers from the Gulf are seeking an easily accessible, flexible, and personalised experience. These customers require experts in their market, who can open up new opportunities to connect with brokers who may not have worked with those from the Gulf previously. 

Therefore, it is no surprise that in July, Nomo saw its highest levels of completions since we launched. 

Offering a flexible and personalised experience is harder for major banks to offer, while continually driving down prices. Though they benefit from economies of scale, this can also lead to rigidity in operations, meaning a more tailored experience is difficult to offer. 

On the other hand, specialist lenders can be more flexible and responsive to market demands, allowing them to capitalise on niche opportunities and customer segments that larger banks may overlook.

It will also help smaller providers that intermediary confidence has been rising, benefitting those who rely on these channels. Amid a price war, competition for consumers’ attention will become more intense. A strong network of intermediaries and brokers who can link prospective customers with a provider that is suited to their needs will set it apart from the larger banks. 

In this climate, it is more important than ever for smaller providers to maintain solid, collaborative relationships with their network of intermediaries. 

Relentless focus on the bottom line by big banks means the needs of customers can be lost. Customers increasingly want financial products tailored to them, so the benefits of focusing on a small customer base will endure.