The overall trajectory is downward, expert says
A flurry of increases in mortgage rates is a ‘minor setback’ rather than a long term trend and there will be more positive movement after the autumn budget, according to leading broker John Charcol.
In the past day, main lenders Barclays and Halifax have both announced rate increases, but Nicholas Mendes, John Charcol’s head of marketing and mortgage technical manager, believes any upward trend will be short-lived.
“The recent small increases we’ve seen are more reflective of temporary conditions, setting us back to where we were in September, rather than indicating a significant shift from earlier in the year,” Mendes told Mortgage Introducer.
“The overall trajectory is expected to be downward, and any further rate increases in the near term are likely just lenders adjusting to temporary market dynamics. As we move forward, I expect lenders will continue to recalibrate, and we’ll see a more consistent downward trend.”
Mendes considers that while most lenders have exercised restraint in response to recent swap rate increases, avoiding kneejerk pricing reactions, the recent repricing from competitors like Santander and NatWest have created a shift in the market.
“Barclays and Halifax’s adjustments seem to be a reaction to these dynamics, aligning rates back to where they were about four to six weeks ago,” he reasoned. “This isn’t necessarily a sign of a significant long-term trend, but rather a minor setback in the short term.
“The market has reacted positively to this week’s inflation data, and while lenders are unlikely to reduce prices immediately, we can expect positive trends after the upcoming budget, as long as there are no surprises that disrupt market sentiment.”
How key are global events in shaping the mortgage market?
Global events, such as the ongoing conflicts around the world and the upcoming US election, play a significant role in shaping market sentiment and investor confidence, in Mendes’ view.
“These factors create an added layer of uncertainty, which can lead to volatility in financial markets,” he acknowledged. “Domestically, the forthcoming autumn budget will be a key moment, as it will provide clearer direction on fiscal policy and could either bolster or dampen confidence in the UK economy.”
How, then should brokers navigate the market in what may prove to be a somewhat unsettled time?
“It’s crucial to stay informed, but equally important to be discerning about the information we consume,” said Mendes, who believes that to maintain a balanced outlook it’s important to focus on the fundamentals - such as inflation trends, lender behaviour, and housing demand.
He added: “Maintain close communication with business development managers to understand lender perspectives and anticipate potential movements. Keeping a pulse on lender strategies will be crucial in navigating the shifting landscape.
“We are fortunate to work in an industry that thrives on sharing knowledge, insights, and commentary. Equally important is staying engaged and supportive - both with clients and colleagues. We all share the same goal of supporting our clients, and by maintaining a positive outlook in our actions and behaviours, we can continue to thrive, even in challenging times.”
Read more: Calm before the storm, or are better days ahead for the mortgage industry?
How will the mortgage market perform heading into 2025?
Mendes remains optimistic about the market for the remainder of this year and into the next.
“Many high street lenders are improving their propositions,” he commented. “This opens more opportunities for borrowers to secure better rates and opportunities to get on the property ladder, which is a positive sign for the future.”
Having been employed by John Charcol for over five years, and previously for HSBC and Lloyds Banking Group, Mendes has seen the industry evolve positively.
“One of the most significant changes has been the growing openness and confidence with which people can share their personal experiences and challenges, including those from diverse backgrounds,” he observed. “There’s a new energy at events, with a broader, more inclusive audience, which is incredibly refreshing and, in my opinion, a very positive shift for the future. This openness fosters innovation, and I believe it will continue to strengthen the industry as we move forward.”
Mendes is clear about the best business lesson he has learned so far.
“Throughout my career, I’ve attended many events and spoken with individuals who assume that you either know or should know the answer, which can make you hesitant to ask questions,” he reflected. “But holding back from asking can lead to self-doubt and missed opportunities for growth.
“Everyone comes with different experiences and perspectives and asking ‘Why?’ helps you understand those viewpoints and broaden your own knowledge. It’s not a sign of weakness; rather, it’s a powerful way to learn, challenge assumptions, and ultimately grow in your career. Embrace curiosity, and never be afraid to ask questions—it’s one of the best ways to expand your mindset and stay open to new ideas.”
