Virgin Money has just announced increases across its 2 and 5-year fixed rate products, which will come into effect at 8pm tonight.
Andrew Montlake managing director at Coreco said, “It is a sorry state of affairs when lenders feel the need to increase rates twice within a short space of time, and illuminates some of the systemic issues in the mortgage market and the pent-up demand of potential buyers and mortgage borrowers.
“Whilst for some lenders it is about wafer-thin margins on products, for others they are not able to remain too competitive for even a small amount of time, as they feel unable to deal with the amount of applications coming through the door without service suffering unduly.
“SWAP rates have become more volatile of late, perhaps due to an air of nervousness over what the Chancellor will do in the budget given the feeling that the Conservatives are in the last chance saloon, and no lender wants to be caught out by a sudden reactionary change in the markets.
“Indeed the Chancellor is on very uncertain ground, and cautious optimism, with well thought through policies, should be the flavour of the budget rather than a Truss-like kitchen sink approach.”
Scott Taylor-Barr, principal advisor at Barnsdale Financial Management said, “Two rates changes close together is bad enough, but then to only move some rates by as little 0.05%?
“How many hours of work is this creating, for both brokers and the lender, for such a tiny change?
“To make matters worse, this change was announced at 2pm today, so we get a whole 3 working hours (with the Bank closing at 5pm, but their LiveChat ending service at 4pm).
“Not to worry though, their online system will continue to allow us to submit business until 8pm tonight; because brokers don’t have social lives or families. Thanks Virgin.”
Justin Moy, managing director at EHF Mortgages, said, “Yet again more reaction to the creeping increase in Swap rates.
“This time Virgin Money have pushed rates up twice in just a few days. Most increases are small and not worth worrying about, but this suggests that lenders’ margins are equally as tight and delicately priced.
“The government hopefully have some huge rabbit to pull out of a hat this week to help mortgage borrowers, as a penny off income tax will do nothing to mitigate an increase in mortgage rates, especially when so much ground had been made in January.”
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