As housebuilders dispute government figures, it puts another question mark over policy and the lack of a long-term minister
Housing statistics have been one of the main topics of conversation over the past week and it was interesting to see housebuilders at pains to point out that the Government had been using figures that left a little to be desired.
It is claimed it is ignoring around a fifth of all new-build completions each year, amounting to about 30,000 homes. Apparently, “poor returns from local authorities and a flawed methodology” are to blame.
It all puts another question mark over ‘housing policy’ – which has been as clear as mud for some time – and reinforces the point that we need someone in charge for the long term.
Elsewhere, Yorkshire Building Society has come up with a carefully worked-out plan to shift the burden of stamp duty from buyers to sellers, which it reckons will save first-time buyers an average of £3,791, rising to £13,171 in London.
It is an interesting idea and, if you were starting from scratch, would make sense. But it means there would be a period where those selling would in effect pay stamp duty twice. Surely it would be easier to just axe the tax altogether for genuine first-timers. And how about encouraging last-time buyers who are downsizing, by reducing their stamp duty bill as well?
It will be interesting to see what our new chancellor does here. There may well be a little surprise in the Autumn Statement.
Meanwhile, in the economy at large there are still some nice headlines around about how much better than expected we have been doing since the Brexit vote. In fact, growth forecasts for the UK have been upgraded for the second month in a row and economists are confident again. What could possibly go wrong?
Also positive were the Council of Mortgage Lenders’ gross lending statistics showing £22.5bn in August: the highest figure for the month since 2007 and a year-on-year rise of 15 per cent.
In the markets this week, three-month Libor is at 0.38 per cent while swap rates have fallen back after last week’s gains.
- 2-year money is down 0.03% at 0.43%
- 3-year money is down 0.04% at 0.44%
- 5-year money is down 0.07% at 0.53%
- 10-year money is down 0.10% at 0.83%
Product-wise, there have been the usual tweaks and transmutations. Nationwide has made changes to the way it looks at let properties in the background. They will now be considered as self-funding only if they cover the income cover ratio at 145 per cent rather than 125 per cent. Any shortfall will be deemed an outgoing.
Meanwhile, Platform has continued to cut rates, with some three- and five-year fixes falling by 0.2 per cent. Its buy-to-let products have also fallen, with five-year fixes dropping by up to 0.65 per cent. It has, however, also tweaked its rental calculation to 145 per cent at 5.5 per cent.
Elsewhere, Scottish Widows has expanded its offset products and has a five-year fixed version priced at 2.29 per cent for professionals and 2.39 per cent for everyone else, both with a fee of £1,499.
Virgin Money has a dedicated new-build processing team offering more support and upfront underwriting within 24 hours. It also has a new five-year fix at 1.97 per cent to 65 per cent LTV with a £995 fee for remortgage clients.
It is good to see Market Harborough has released something interesting in its Regulated Family Let product, which allows customers to borrow on a property they will let to a close relative. The rate is 3.99 per cent with a 1 per cent fee to 70 per cent LTV. What is more, the rental income is based on the pay rate at 125 per cent.
Dudley Building Society has also put out a new product aimed at the expat market, which is a great move. Available to £500,000 and 60 per cent LTV, the discounted rate is 3.99 per cent for both buy-to-let and residential expats.
Elsewhere, Paragon has made a welcome move on five-year fixes for its buy-to-let products, which now have a limited range with reduced rental stress tests starting at 125 per cent at 4 per cent. For HMOs and multi-units it is 130 per cent at 4 per cent. The rates start at 3.75 per cent with a £1,999 fee to 75 per cent LTV.
Finally, it was good to see credit given to the regulated bridging market, with the FCA recognising that “a lot of effort has been put in to raising standards and building a sustainable market by regulated bridging firms and the Association of Short-Term Lenders”.
Andrew Montlake is director at Coreco