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Cameron’s Cabinet reshuffle was relatively tame, replacing housing minister Schapps with Prisk, and they could take a lesson from this week’s product releases, which have taken an aggressive stance

It’s back to school time for everyone and the hard work to get a decent final quarter in before year end is under way. The Government has also got in on the act although with a relatively tame cabinet reshuffle which is seen Grant Schapps move on from housing to be replaced by Mark Prisk.

In terms of background, he does seem to have the right credentials for the job – a chartered surveyor by trade who also happens to be married to Lesley Titcomb, now a senior regulator at the FSA.

Hopefully, this experience will stand him in good stead in what is an important role for the future economic welfare of the country.

In the markets, three-month Libor has fallen a touch again this week, now standing at 0.68 per cent, while swap rates have dropped a bit again.

1-year money is unchanged at 0.595 per cent
2-year money is down 0.01 at 0.79 per cent
3-year money is down 0.02 at 0.81 per cent
5-year money is down 0.04 at 1.035 per cent

graph

Many of the reported product releases this week have used the word aggressive which I cannot work out is actually the case or just a bit of sensationalism trying to get things moving. Either way it is welcomed.

First up is Barclays for launching an aggressive remortgage and retention campaign looking to capitalise on other lenders’ SVR hikes and showing how the Funding for Lending scheme is working.

They have cut their two-year fixed great escape remortgage product to 3.49 per cent as well as reducing the rate on its NewBuy product.

Barclays also slashed retention rates for existing customers by 0.5 per cent, including a fee-free five-year fixed rate at 3.49 per cent up to 95 per cent LTV which is great news for many, so top marks there.

Aldermore have become the latest lender to join the NewBuy Scheme, releasing some decent rates at 5.48 per cent available to 95 per cent LTV which is more good news for first-time buyers.

In the direct channel, aggression has been shown by every brokers favourite HSBC, which has released the “lowest ever fee free seven-year fixed rate mortgage” up to 90 per cent LTV at 4.89 per cent.

Meanwhile, Tesco has slashed rates by 0.5 per cent and also has a great deal on three for two on chicken giblets at an astonishing £2.99.

Broker-friendly BM Solutions continue its welcome quest for more business with some impressive new buy-to-let products with a range of fee options and its usual excellent levels of service and smiley, friendly BDMs.

Coventry has added to its competitive suite of products with a new range of residential and offset products at lower LTVs up to 65 per cent.

Remortgage products with no arrangement fee and the usual freebies are available from 3.10 per cent.

Accord has tweaked its interest-only policy whereby sale of property is now only available up to 50 per cent LTV. It is still one of the more flexible lenders where interest-only is concerned and will accept regular overpayment up to 75 per cent LTV.

Finally, Abbey has aggressively returned with two-year fixes from 2.79 per cent.

It is also increasing some of its maximum loan limits on products to £1m and its flexible remortgage product is reducing to 3.99 per cent.

May the final quarter of the year be successful for you all.

Heroes

Barclays Woolwich for their aggressive retention rates. Giving customers the option to fix for five years at 3.49 per cent up to 95 per cent LTV is something other lenders should follow and will restrict mortgage prisoners’ future issues when rates eventually rise once more.

Villains

Banks internal sales incentive schemes. I agree with Martin Lewis’ published comments on these. It is all very well having sales targets but they have to be structured in the customers’ best interest, not just designed to push high commission products that offer poor value.

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