This morning, Coventry for Intermediaries announced it is closing selected products from 8pm tomorrow (see screengrab). UK newswire, Newspage, asked brokers for their views, below:
Here’s what’s changing:
Owner-Occupied (new business)
- No changes to existing customer only (product transfer and further advance) rates
- Closing all 2, 3 & 5 Year Fixed New Business £999 fee rates (excl. Offset, Interest-only & Offset Interest-only)
- Closing all 2, 3 & 5 Year Fixed New Business rates at 65% and 80% LTV
- Closing all 2 & 5 Year Fixed New Business Offset rates at 65% LTV
Buy to Let (new business)
- No changes to existing customer only (product transfer and further advance) rates
- Closing all 2 and 5 Year Fixed BTL and Portfolio BTL New Business £1999
fee rates - Closing all 2 and 5 Year Fixed BTL and Portfolio BTL New business rates at 50% LTV
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, states “Unfortunately, Coventry won’t be the last lender to make such an announcement this week. There are still a few lenders that haven’t repriced since last week’s inflation data and the rise in SWAP rates. On a positive note, SWAP rates have started reducing but this may not be enough to pacify the market in the immediate future. As always, getting the right advice now is imperative for anyone considering obtaining a mortgage shortly.”
Craig Fish, Director at Lodestone Mortgages & Protection, stated “We have seen SWAP rates jump dramatically over the past week or two and, as a result, we are receiving emails daily with lenders announcing rate removals and/or increases. These products are likely to be replaced but we just don’t know at what level yet. I suspect that this is more about business and service levels because Coventry are one of the latest to make changes, having not changed their products for the past two weeks, so they were receiving more business than those who have made changes. Coventry certainly won’t be the last lender to make changes this week, and more can be expected.”
Justin Moy, Managing Director at EHF Mortgages, stated “This was not unexpected, as Coventry didn’t announce any changes last week, so this will be a catch-up move to maintain their position in the pack. As always, the advance notice is welcome and stops both brokers and clients stressing over knee-jerk rate withdrawals, not the environment our profession needs to be living under. What is good to see is the existing client range, for product transfers, has not been affected, so that is also a good sign of loyalty from the lender.”
Graham Cox, Founder at SelfEmployedMortgageHub, stated “All the major lenders are being forced to reprice their products due to the fallout of last week’s worse-than-expected inflation figures. Markets took fright, swap rates soared and UK gilt yields rose to become even more expensive than Italian debt. It was like Liz Truss all over again. Swap rates are now edging down slightly but remain very high. Not good news for a government swimming in debt.”
Jonathan Burridge, Founding Advisor at We Are Money, stated “Coventry’s Treasury Department is one of the more active and they are regularly repricing so this is not unusual. Rates are going to bounce around for a while. This is the market returning to normality. It just means customers and advisers need to be more decisive and both parties need to understand that we do not control the market, only react to it.”
Lewis Shaw, Owner and Mortgage Broker at Riverside Mortgages, stated “Fair play to Coventry: not only are they a top-class lender, but they always give us the heads-up with at least 48 hours’ notice before any withdrawal, so we can at least try to manage client expectations. This is in stark contrast to some lenders at the end of last week who gave us just a couple of hours before withdrawing entire product ranges. If lenders could follow suit, that would be perfect as that way, we, as brokers, can prioritise cases and manage diaries better rather than having to drop everything at the last moment. It’s mentally exhausting for clients, us and everyone else involved in the process.”
