Why is now the right time for MFS to drop its residential bridging mortgage rates?

“Primarily, we made the decision to adjust our residential bridging and BTL mortgage rates due to the shift in the economic landscape that we have witnessed in the last few months. 

“Since the Bank of England pressed pause on its rate hiking cycle last August, any fears of further rate hikes have dissipated. Economists now predict that the base rate has peaked at 5.25%, with many expecting it to fall again in the second half of 2024, or perhaps even earlier. 

“As a result, we’re seeing lenders across the board re-evaluate their products, rates and loan terms. 

“So, by adjusting our rates now, we are proactively aligning our offerings with economic and market trends — moreover, we are always keeping a keen eye on any changes that might occur on Threadneedle Street in the months ahead. 

“Brokers and their clients need certainty, and by readying our products ahead of time by improving rates from the start of the year, we’re ensuring we’re well placed to deliver that level of certainty.”

Why has MFS cut these rates?

“We are constantly looking for ways in which we can adapt and improve our products in order to match the needs of brokers and borrowers — In truth, rate cuts are just a small part of how we do this. 

“While scrapping to have the lowest rates on the market is not our modus operandi, we know that we have to remain competitive, which is what these rate cuts aim to do.

In terms of residential and commercial bridging rates how has MFS adapted to the current economic climate and what does it plan for the coming year?

“2023 saw the lending landscape in a constant state of flux, the constant changing of rates, along with regular product withdrawals, were major headaches for borrowers and brokers.

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“However, thanks to the strength of our funding lines and the success of our growing loan book, we were in a position to commit to a rate freeze for a large portion of the year (June to October), providing brokers and their clients with much-needed certainty. 

“We evaluate our products, rates and terms on a daily basis — where we think we can make improvements, we do. 

“But we also want brokers to know that we’re not constantly moving the goalposts — we act decisively and, crucially, focus heavily on proactively communicating changes to the ever-growing network of brokers we work with. 

“This is a challenge when our rates are as flexible as they are, but again communication is key, and we outline our rates and fees by underwriting upfront – we want to provide clarity for the borrower as soon as we can, so that everyone involved knows where they stand.”

How do you see the opportunities for the bridging markets and clients for 2024?

"The drop in inflation and static base rate has allowed for property buyers and investors to refocus their intentions, with signs pointing towards a stronger performance for bricks and mortar in 2024.

“We enter the new year after a busy few months, but with a cautious sense of optimism returning within the property market.

“While average UK house prices are estimated to have fallen by 1.8% across the past year, the data also shows that Q4 saw a return to growth, with modest upticks reported in average house prices between October and December.

"That is not to say that challenges do not remain, most notable, perhaps, is political uncertainty – with a general election expected to take place in the final months of the year, Westminster has been a hive of activity, and property investors will need to take note. 

“From the scrapping of new EPC rules and promises to reform the planning system through to a crackdown on corruption in the property sector and a raft of policies unveiled in November’s Autumn Statement, we should expect to see property-related policy take centre stage in the coming months. 

"However, with markedly improved macroeconomic conditions at the start of this year when compared to last, there is every reason for optimism that 2024 will prove a productive time for property investors and brokers. 

“At MFS, we saw higher demand than ever last year, with our team growing in size and strength. We expect similar growth this year and look forward to helping brokers and their clients access the opportunities that will surely emerge in the coming months."