Barclays adds five-year fix and cuts mortgage rates; Virgin and Clydesdale tweak SVRs – round-up

Barclays adds five-year fix and cuts mortgage rates; Virgin and Clydesdale tweak SVRs – round-up

Reductions include Barclays’ purchase-only two-year fix at 60% loan to value (LTV) for premier borrowers, which has gone down from 4.67% to 4.49%. This has an £899 product fee. 

The lender has also lowered the equivalent mortgage rate for standard borrowers from 4.68% to 4.52%. The rate on the fee-free option has dropped from 4.88% to 4.71%. 

Reductions of up to 0.33% have also been made to select five-year fixed deals at 60% and 75% LTV, including a fee-free option at 75% LTV, which has been cut from 4.57% to 4.24%. 

Barclays has also lowered remortgage rates at 60% and 75% LTV tiers on two- and five-year fixed rates, either with or without a fee. 

Changes are effective from 12 July.

The lender has also added a remortgage-only product at 75% LTV, which is a fee-free five-year fixed deal under its Great Escape range and priced at 4.68%. 

This is the second time in the last two weeks that Barclays has reduced mortgage rates. 

 

Virgin and Clydesdale adjust SVRs 

Virgin Money and Clydesdale Bank have lowered their variable mortgage rates. 

From today, the standard variable rate (SVR) at both lenders has been cut from 9.49% to 9.24%. 

Virgin Money’s buy-to-let (BTL) variable rate has gone down from 9.69% to 9.44%. 

Clydesdale Bank’s offset variable rate has moved from 9.7% to 9.45%, while its BTL variable rate and offset variable investment housing loan rate has fallen from 9.99% to 9.74%. 

This week, Virgin Money has reduced rates on its exclusive mortgage range and released a product with up to £15,000 cashback to encourage borrowers to make their homes more energy efficient.

Rent and mortgage costs settle in June – Barclays

Rent and mortgage costs settle in June – Barclays

Analysis of customer current accounts at Barclays revealed this was the slowest rate of annual growth for the cost of rent and mortgages since March last year. 

Spending on utilities also fell during the month, with a 15.6% decline in June. Barclays put this down to falling energy prices and said the decline was set to continue following the most recent price cap decrease on 1 July. 

There was also a boost in consumer confidence, with 73% of Brits feeling optimistic about being able to live within their means, which was 1% higher than previously. Some 49% felt confident about their job security, which was a 4% improvement. 

 

Renter and landlord wants 

Barclays also asked renters the top 10 factors they considered “non-negotiable” when looking at a rental property, and polled landlords on what they looked for from prospective tenants. 

Some 46% of renters said the presence of damp and mould was a “deal breaker”, while a third – 34% – said they needed access to a living room. Some 32% prioritised having access to outdoor space. 

Barclays found that 32% of renters felt properties should have double glazing to retain heat, save on energy bills and block out noise. 

A fifth of renters said there was too much competition for properties in their area. 

For landlords, 27% of respondents thought tenant cleanliness was an important consideration and an equal proportion said the same about proof of income.

A third of landlords said they would accept less rent from existing tenants who look after the property instead of finding tenants who would pay more in rent. Some 23% of landlords said they would accept an offer below asking price if the tenant was flexible with the move-in date. 

A third – 34% – of landlords said personally communicating with prospecting tenants would make them more likely to consider accepting their application. However, just 23% of renters said they were willing to do this. 

 

Less attention to home improvement

Barclays said the damp weather hampered Brits’ efforts to renovate their homes, as indicated by a 9.4% decline in home improvement and DIY spending. Spending on garden centres also fell by 12.7%. 

However, the survey found that 36% of consumers were prepared to spend more money as the weather got better. 

Mark Arnold, head of savings and mortgages at Barclays, said: “Our latest spending figures paint an encouraging picture for UK consumers – rent and mortgage payments are stabilising, energy bills are coming down, and confidence is on the up. However, we’re yet to see this translate into spending on sprucing up homes and gardens, with most household categories still in decline. Now that summer has arrived, retailers will be hoping that the warmer weather can unlock that pent-up demand. 

“The research also reveals how prospective tenants can stand out in a crowded market by highlighting sought-after attributes such as willingness to take good care of the property and having strong character references. Meanwhile, landlords looking to upgrade their properties can choose from a range of desirable improvements, many of which don’t require significant remodelling, such as damp-proofing, installing double glazing, and sourcing faster internet.” 

Barclays cuts residential and buy-to-let mortgage rates

Barclays cuts residential and buy-to-let mortgage rates

For existing borrowers, its premier purchase five-year fixed mortgage at 60% loan to value (LTV) with an £899 fee has been lowered from 4.25% to 4.22%. The loan size for this product ranges from £5,000 to £2m. 

Barclays has also made changes to rates for its existing borrowers reward range, such as a two-year fix at 60% LTV with a £999 fee, which has been reduced from 4.75% to 4.67%. The fee-free equivalent has been cut from 4.98% to 4.9%. 

At 75% LTV, the corresponding rates have been cut to 4.75% and 4.96% respectively. Meanwhile, at 85% LTV, the equivalent products now have rates of 5.22% and 5.43% respectively. 

Within the existing borrower reward range, the option for loans over 85% LTV with no fee has been cut by 0.2% to 5.87%. 

Barclays has also reduced five- and 10-year fixed rate options within this offering. 

Across its BTL mortgages, Barclays has reduced its existing borrower reward two-year fix at 65% LTV from 5.15% to 4.95%. This has a £1,795 fee. 

The fee-free option has been lowered to 5.5%, down from 5.3%. 

At 75% LTV, the equivalent products now have rates of 5% and 5.34% respectively. 

For borrowers wanting a five-year fix, the corresponding options at 65% LTV are priced at 4.34% with a £1,795 fee and 4.58% with no fee. 

For the option over 75% LTV, the rate on the fee-free deal will be cut from 5.75% to 5.55%. 

 

More lenders to cut mortgage rates? 

This is the second time in two weeks that Barclays has reduced its mortgage pricing for existing borrowers, and the lender follows HSBC, Natwest, Santander, TSB and Halifax in lowering rates recently. 

Mark Harris, chief executive of SPF Private Clients, said: ‘With the big five lenders – Barclays, HSBC, Santander, TSB, Halifax and Natwest – reducing their mortgage rates, lenders continue to jostle for business as they ramp up the summer sales. 

“Those lenders who haven’t yet repriced are likely to follow suit, as long as service levels allow.” 

He added: “Even though swap rates, which underpin the pricing of fixed-rate mortgages, are not showing a consistent downwards trend, the need to generate more business seems to be motivating lenders to tweak their rates. 

“It’s good news for borrowers, many of whom are struggling with affordability after successive rate rises and then holds. Expectations of a rate reduction in August are high.” 

According to Chatham Financial, the two-year swap rate was 4.48% on 2 July, down from 4.61% last month. The five-year swap rate fell from 4.05% to 3.98% over the same period. 

One to One: Sidney Wager, Barclays

One to One: Sidney Wager, Barclays

This month, we are talking to Sidney Wager (pictured), head of intermediary market development at Barclays.

 

How did you get started in the mortgage industry? Why would you recommend the industry to others?

Having joined such a large institution, I initially worked in a range of roles within Barclays that offered different directions and scope.

I was running the largest and most valuable internal channel region when the opportunity arose to move into the intermediary space. I was content where I was at that time, but the pull of being tasked with helping to transform the direction of our intermediary-facing business and the amount of untapped potential on offer was an opportunity that does not come along too often. It was impossible to turn down.

The thing that really attracted me to the intermediary market was how fast-paced it is in terms of its volatility, unpredictability, and the intensity of the competition. And these factors still represent why I would recommend the industry to others who are ready to embrace the challenges and opportunities on offer rather than being fazed by them.

 

The mortgage market has started to improve in the first few months of the year. Where does Barclays see opportunities for growth, and are there areas that it is looking to expand in?

It is always positive to see improvement in the market and we are emerging from a period where some challenging conditions forced us to think differently as a business and look deeper into where the opportunities for growth and improvement lie.

By this, I mean areas such as ESG and the green agenda through to intergenerational lending. It could also be through changes in criteria, internal processes and how you present yourself as a business.

Growth is not always about looking for the ‘shiny new toy’, it also comes through improving on the things you already do well, and in cementing improvements where they may not have been so strong previously. We are simultaneously setting out to do both and the last year has afforded us the time and opportunity to rethink this.

Is the current mortgage market the new norm or is it a short-term phase?

If I could answer that with any genuine certainty, then I would be a very wealthy man.

The first thing to address is that I am not sure we even know what the word “normal” actually means anymore, following the unprecedented events over the last few years. Previously, there was a good chance that you could predict the future based on the past, but today’s market is far more situational, and we have to adjust accordingly. Strategic agility is key and the ability to move quickly in step with market conditions and consumer behaviour is paramount to success.

Fortunately, we operate in a highly reactive industry that has become accustomed to change and, generally speaking, I think it is one that has coped incredibly well with some significant ups and downs. And this resilience should provide plenty of encouragement for what the short-, medium-, or longer-term future looks like.

Product transfers (PTs) are an increasingly important part of the business. Given the higher numbers of these deals brought back into the lender, what is your view on higher PT fees/parity with new business fees?

There is more to the lender/broker relationship than just fees. It incorporates the whole ecosystem, from submission to completion and everything in between, including the quality of our business development manager (BDM) team, who we consider to be best in class.

We fully understand the importance and value offered by our intermediary partners and this is a symbiotic relationship. However, margins have been reduced across the industry and we have to be careful about how we manage these and where and how any additional costs are attributed.

The reality is that we are a commercial entity who is fully accountable to our shareholders and stakeholders. As such, we will continue to review all elements of the business, but rest assured that we always aim to do the right thing for our intermediary partners, shareholders, stakeholders, and borrowers.

How does Barclays intend to keep the broker relationship strong?

During the past 12-18 months, we have invested a huge amount of time and money into improving the end-to-end experience for our intermediary partners and their clients. This has meant prioritising the time spent with the broker community to gain a stronger understanding of their businesses, how they interacted with us, where we were succeeding and where we have opportunities. This led to the #YouSaidWeDid campaign you may have seen across some of our social media platforms, where we have responded to feedback from our partners.

We’ve also begun the process of rebuilding our mortgage application systems, a move that represents a significant investment for the business and demonstrates our commitment to the intermediary market. This digital transformation will involve ongoing development and I’m sure this will prove to be an eye-opening experience from a service and delivery perspective for everyone involved.

In the current market conditions, it’s all about taking a step back – where possible – to implement positive change and better position ourselves as a business to successfully face the challenges and optimise opportunities as they arise.

We will continue to engage across all elements of the market including network and clubs, trade bodies and broker firms as the key will be to maintain and encourage a healthy respect, even where there may be slightly conflicting priorities. Great industries work through this partnership model and thrive – this is us.

The Mortgage Charter was a huge undertaking by lenders and the government to support customers. What has the impact of it been so far at Barclays and has it changed internal processes a lot?

The Mortgage Charter is a great initiative that demonstrates just how quickly the industry can come together to provide flexibility to help customers adjust to changes in their finances. It showed agile thinking, a real recognition of the economic climate and a genuine understanding of the difficulties being faced by some customers.

The short time frames involved tested us as a business, but we feel we are in a better place because of it.

Through the charter, we have supported circa 12,000 customers. As the interest rate environment stabilises, we are seeing demand now decreasing month-on-month, with the majority of those coming to the end of the temporary support returning to full payments.

Consumer Duty is another big thing that has come up in the past year. What impact has it had on Barclays and the sector more widely, and do you think it is a positive for the sector?

Anything that benefits the end customer and creates equitable outcomes should certainly be viewed as a positive development.

The key thing about Consumer Duty is the fact that it has made all businesses re-assess how they are being run in their entirety. From a Barclays perspective, it has certainly helped us develop a far more rigorous commercial approach and in terms of how we service a range of customer needs.

It encouraged looking at customer impacts across the whole supply chain and the full customer experience, where collaboration between lenders and partners is even more paramount if we are to succeed in achieving those good customer outcomes and avoiding the foreseeable harms.

Within Barclays, a great deal of focus continues to be placed on carrying out fair-value assessments of our products and our product information templates to ensure our intermediary partners can fully understand the characteristics of the product or service and the identified target market.

This means the inclusion of greater consideration to the needs, characteristics, and objectives of any customers with characteristics of vulnerability. There is also a much more determined emphasis on identifying the intended distribution strategy and ensuring that the product or service will be distributed in accordance with the target market.

It’s been hugely encouraging to see so many areas come together, both from an internal and external perspective, across the whole customer journey, with working with a common focus clearly in mind can only be a positive going forward in delivering better outcomes and avoiding potential harms for our customers.

 

Barclays completed the acquisition of Kensington Mortgages in 2023. How is it progressing, and do you think other high street lenders may acquire specialist lenders?

The acquisition presented an exciting opportunity to broaden Barclays Bank UK’s existing mortgage product range by adding a best-in-class specialist mortgage lender with an established track record in the UK market, further enhancing our capabilities to deliver next-generation, digitised consumer financial services.

Since its completion, there have been clear benefits for both parties, and this represents an excellent example of two major brands working closely to extend their propositions to a wider range of individuals across the UK.

Although, it’s not for me to say if this type of acquisition strategy would be the right path for other lenders, as this will depend on a huge number of key factors.

You are a great supporter of the Diversity and Inclusivity Finance Forum (DIFF), and diversity and inclusion (D&I) in the industry more generally. Do you think the industry is making enough progress, and what would you like to see in an ideal world?

As an industry, I think it’s fair to say that – despite significant progress being made – we are still not as diverse or inclusive as we could or should be and this progress must be tempered with the knowledge that there is still some way to go.

The work of IMLA, AMI, DIFF and Accrue – to name but a few – is trailblazing in terms of asking the tough questions and putting the mirror up. However, this is not a tick-box exercise, it’s a movement that should be embedded within company cultures for several reasons.

We need to acknowledge and be cognisant of the fact that the DEI conversation covers several genres. It covers sexuality, it’s gender, it’s disabilities, it’s neurodiversity, it’s ethnicity. It comes in various shapes and guises.

It’s great to see that the right conversations are being had, curiosity levels have certainly been raised and the realisation of the need for change is evident, but I remain incredibly impatient.

The ideal world has diverse representation at all levels and mirrors the society and communities within which we all serve. This would not be the ongoing conversation it currently is.

If only we could suspend reality and get back to being 3-4 years old when there is precious little bias, that would be ideal, but sadly, we don’t live in an ideal world.

HSBC gears up for mortgage rate cuts across entire range

HSBC gears up for mortgage rate cuts across entire range

The bank is set to cut rates across its product transfers, deals for existing borrowers looking to increase their mortgage loans, new customers, remortgages and buy-to-let investors.

The majority of rate cuts are available up to 90% loan to value (LTV) with the exception of buy-to-let mortgages.

Rate cuts will be applied to the bank’s five-year fixed fee saver deal for switching customers up to 95% LTV.

The rate cuts, which have yet to be announced, will be available from tomorrow.

A HSBC spokesperson said: “We are firmly focused on helping customers onto or up the property ladder. There are a number of factors that are taken into account when setting mortgage rates, and following a review, we are reducing over 300 mortgage rates across our residential and buy-to-let mortgage ranges, from tomorrow.”

Earlier this week, Barclays cut rates for selected existing residential borrowers and across its green mortgage range.

The MPC chose to maintain the base rate at its current level of 5.25% for the seventh month running with a vote of 7-2, despite inflation returning to its 2% target this month.

The decision to hold the base rate came as a disappointment to the industry and to borrowers. Mortgage professionals said it looked likely the central bank was waiting for wage and services inflation to full further before adjusting the base rate.

However, economists are still banking on a base rate cut this summer.

The MPC is next due to meet on 1 August.

Barclays makes a number of mortgage rate cuts

Barclays makes a number of mortgage rate cuts

These changes will apply from 25 June to purchase-only products. 

This includes a two-year fix at 60% loan to value (LTV) with an £899 product fee. The rate has fallen from 4.99% to 4.68%. Meanwhile, the corresponding product for premier borrowers has reduced from 4.98% to 4.67%. 

The fee-free option at the same tier has had a rate cut of 0.25%, bringing it to 5.13%. 

At 75% LTV, the two-year fix with an £899 fee has gone down from 5.05% to 4.75%, while the fee-free alternative has reduced from 5.23% to 4.98%. 

At 85% LTV, the two-year fix with an £899 fee has been lowered from 5.14% to 4.93%, while the fee-free option has been cut from 5.33% to 5.15%. 

The fee-free two-year fixed rate at 90% LTV has been lowered from 5.76% to 5.48%. 

Across Barclays’ five-year fixed offering, the option at 60% LTV with an £899 fee has been reduced from 4.41% to 4.23%, while the deal for premier borrowers has been cut from 4.4% to 4.25%. 

At 75% LTV, the five-year fix with an £899 fee has been reduced from 4.53% to 4.38%, and the fee-free product has been cut from 4.67% to 4.52%. 

Reductions have also been made at 85% and 90% LTV, as well as across the lender’s Green Home Mortgages products at 75% and 90% LTV. 

Rates across its green mortgage offering now begin at 4.75%, down from 4.8%, for a five-year fix at 90% LTV with a £999 fee. 

Barclays follows the likes of Natwest and Coventry Building Society in reducing pricing across its mortgage range.

Spending on rent and mortgages rises over 6% YOY in May – Barclays

Spending on rent and mortgages rises over 6% YOY in May – Barclays

According to Barclays’ Property Insights, which collated data from millions of Barclays current accounts and combined it with consumer research, while rent and mortgage spending was on the up, there were “signs of optimism” emerging, pointing to falling inflation and energy prices and increased spending on home improvements.

The report found that six in 10 of those surveyed said that the inflation slowdown had made it easier to live within their means, and around 56% said they felt more confident in their household finances.

Confidence in the strength of the housing market also increased from 25% in April to 27% in May.

Barclays added that the month-on-month difference in housing costs was marginal at negative 0.01%, showing consumers may not be feeling worse off in the short term.

This can be seen in the fall in consumer spending on utilities, which fell 12.5% in May due to the decrease in the Ofgem energy price cap in April.

 

Homeowning vs renting

Around a tenth of people who have never owned a property said they felt under societal pressure to be a homeowner.

However, nearly a third said that the cost of the deposit was the biggest barrier to owning a home, and 18% said that they were delaying getting on to the property ladder due to higher interest rates.

One in seven renters said that they would prefer to rent rather than own a home due to heightened flexibility.

Around 12% said that they prefer renting due to low confidence in the strength of the UK housing market.

The Bank of Mum and Dad is also growing in usage, with 19% of those aged 18-34 years old using such financial support, compared to 10% of the over-55s.

Nearly a third bought a home as it was cheaper than renting long term, and 24% said it was a good investment.

Mark Arnold, head of savings and mortgages at Barclays, said: “Our latest spending figures show that rent and mortgage payments are still posing a challenge for consumers. However, there are encouraging signs of improvement ahead, with falling inflation and interest rate cuts in Europe giving hope that the Bank of England will follow suit in the coming months.

“Many lenders are finding creative solutions to the problems faced by first-time buyers. Products like Barclays’ Springboard mortgage or Kensington Mortgages’ flexible lending criteria help to overcome some of the barriers and make homeownership more feasible.”

Barclays and TSB make rate changes – round-up

Barclays and TSB make rate changes – round-up

Barclays’ changes will come into force from 24 May.

Within its existing product range, its residential purchase-only five-year fixed rate at 90% loan to value (LTV) with a £999 fee will fall from 5% to 4.9%.

Its green home five-year fixed rate at 90% LTV with a £999 fee will decrease from 4.9% to 4.8%.

Barclays’ residential purchase-only premier three-year fixed rate with a £999 fee at 60% LTV will rise from 4.32% to 4.57%.

The firm’s remortgage-only premier two-year fixed rate with a £999 fee will go up from 4.6% to 4.85%.

Its two-year fixed rate at 60% LTV will increase from 4.61% to 4.86%, and its two-year fixed rate at 75% LTV will go up to 4.75% to 5%. Both come with a £999 fee.

The lender’s fee-free Great Escape two-year fixed rate at 60% LTV will rise from 4.83% to 5.08%, and at 75% LTV, it will increase to 5.17%.

Within its existing customer purchase and remortgage, its two-year fixed rate at 60% LTV will rise from 4.61% to 4.91%, and at 70% LTV, the price will go up from 4.71% to 4.96%. At 75% LTV, the rate will increase from 4.75% to 5.05%. All come with a £1,999 fee.

In Barclays’ existing customer reward range, residential two-year fixed rate EMC Reward deal at 60% LTV is priced at 4.75% with a £999 fee, and its fee-free version is 4.98%.

At 75% LTV, its £999 fee version is 4.9% and its fee-free version is 5.07%, while its 70% LTV version with a £1,999 fee is 4.66%, and its switch-only version is 4.86%.

Last week, Barclays announced several mortgage rate reductions across products for existing purchase and remortgage borrowers.

 

TSB cuts rates

TSB is lowering residential rates and reintroducing select tracker house purchase and remortgage products.

In its residential range, two- and five-year fixed first-time buyer and homemover deals between 75% and 95% LTV will fall by up to 0.4%.

Three-year fixed first-time buyer and homemover up to 90% LTV will decrease by up to 0.35%.

TSB has reintroduced two-year tracker first-time buyer, homemover and remortgage products.

Two-year fixed remortgage deals from 75% to 90% LTV will go down by up to 0.25%, and five-year fixed remortgage deals up to 90% LTV will decrease by up to 0.2%.

Shared ownership and shared equity rates will decrease by 0.4% and 0.25% respectively.

Within its buy-to-let (BTL) range, TSB would reintroduce two-year tracker house purchase and remortgage deals.

Barclays and HSBC lower mortgage rates – round-up

Barclays and HSBC lower mortgage rates – round-up

Changes apply from 17 May, and cuts of up to 0.45% have been made to Barclays’ mortgage rates. 

This includes the remortgage-only product for premier borrowers at 60% loan to value (LTV), which has been cut from 4.76% to 4.31%. This deal is fixed for five years and has a £999 fee. 

The alternative for standard borrowers has been cut from 4.77% to 4.32%. 

The five-year fixed remortgage at 75% LTV with a £999 fee has been reduced from 4.84% to 4.45%. 

Changes have also been made to select Great Escape, standard and premier remortgages at 60% and 75% LTV. 

Across its purchase deals, reductions have been made to select three- and five-year fixed deals, including the standard five-year fix at 60% LTV with a £899 fee, which has gone down from 4.47% to 4.34%. 

At 75% LTV, the five-year fix with a £899 fee has been cut from 4.73% to 4.44%, while the fee-free option has gone down from 4.9% to 4.58%. 

Reductions have also been made to purchase and remortgage deals, as well as Barclays’ reward options for existing customers. 

 

HSBC lowers mortgage rates 

HSBC has also announced reductions to mortgage rates, which are set to take effect from 17 May for new and existing borrowers.

This will apply to residential and buy-to-let (BTL) options for purchase, remortgage, homemoving, borrowing more, international, cashback and switching options. 

Adjustments have been made to select standard, fee-saver and premier exclusive products, fixed for two, three or five years. This will also apply to deals up between 60% and 90% LTV. 

HSBC has also pulled its 10-year fixed fee-saver and standard products for residential remortgage until further notice. 

These changes come a week after HSBC increased its existing borrower rates.

Top 10 most read mortgage broker stories this week – 10/05/2024

Top 10 most read mortgage broker stories this week – 10/05/2024

Brokers reacting to Halifax announcing that a maximum broker fee would be in place from June and the base rate being held at 5.25% for the sixth consecutive month also ranked highly on the list of this week’s most read mortgage broker stories.

 

The British Mortgage Awards 2024 finalists announced

Maximum broker fee caps could be a ‘step too far’, brokers say

 

Base rate holds firm at 5.25% but long-awaited cut set for summer

 

Savills forecasts 20% rise in house prices by 2028

 

 

Pepper Money’s Adams shares journey of overcoming alcohol abuse in MIMHC interview

 

Impact of not collecting customer reviews is ‘significant’ – Rushton

 

Base rate hold disappointing but mortgage market in better position – reaction

 

Barclays improves mortgage criteria for contractors

 

Halifax makes interest-only change; Natwest ups existing customer rates – round-up

 

HSBC increases existing customer rates