It was all about George Osborne last week as the Chancellor’s Autumn Statement rolled into town.
Key in our market was of course the plan to charge foreign investor’s capital gains tax from April 2015 which once you really analyse this may not have such a big effect and seems fair enough. Delaying this until 2015 was a little surprising and as there are a myriad of reasons why foreigners invest in UK property this is unlikely to really deter that many.
What is more interesting was the reduction of the capital gains tax private residence relief final period exemption. This means those keeping their existing property and letting it will only have 18 months to sell without capital gains tax rather than 3 years with the aim of reducing the incentive for those with multiple homes to exploit the rules.
While moves against the buy-to-let market have been talked about for a while this is the first real action we have seen and no doubt a whole swathe of “accidental landlords” will now be checking their figures.
The big, now annual, missed opportunity is that there are still no signs of much-needed stamp duty reform. This is for my mind the single biggest issue stopping many people moving and needs to be addressed.
In the markets three month Libor has given up and gone home at 0.52 per cent, while swap rates have risen slightly more significantly over three and five years.
- 1-year money is up 0.01 per cent at 0.585 per cent
- 2-year money is up 0.04 at 0.85 per cent
- 3-year money is up 0.08 at 1.17 per cent
- 5-year money is up 0.11 at 1.845 per cent
There have been some more names added to the Help to Buy table with Aldermore and Virgin name-checked by the Chancellor, while Santander has confirmed it will have 95 per cent products from January which will be available through brokers.
Aldermore will offer products from 85 per cent to 95 per cent LTV and will be the first bank to offer remortgages on the scheme.
In product news there have been some more changes from Virgin Money, especially around the interest only criteria. They have sensibly removed the minimum loan size of £300,000 and introduced a minimum property value of £500,000. There is also a minimum joint income requirement of £100,000, but interest-only will not be available for first-time buyers and sale of property has disappeared into the either which is a shame on low LTV cases.
Virgin has improved its buy-to-let range with two-year fixes now available from 2.89 per cent at 60 per cent LTV with a £2,495 fee.
Woolwich has pleasingly increased the LTV on its popular offset products to 75 per cent LTV and cutting a selection of products rates.
It has also cut its 80 per cent LTV three year fixed rate to 3.09 per cent.
Interestingly Barclays has also decided to bring its call centres back from India to the UK, though the main reason for this remains unclear.
Nationwide continued its endless tinkering and now states that if there is a change of property mid-way through the process a new application will need to be submitted and a new product reserved. In a market where gazumping is re-emerging this is a pain when a simple change of property form could be used.
Lloyds Banking Group will become the latest lender to link procuration fees to quality, looking at applications to completions ratio, arrears performance and what measures a firm has put in place to prevent fraud.
There have also been a couple of buy-to-let refurbishment products launched last week with Paragon promoting its 5.25 per cent two-year tracker up to 75 per cent LTV with a 2 per cent fee.
Meanwhile the excellent Kent Reliance has a product at 4.49 per cent up to 75 per cent LTV. It will lend initially on the purchase price and then 75 per cent of the new value after works as long as completed within four months.
Finally it was good to see the excellent Miguel Sard made chief of Santander’s new mortgage division, in a move that also saw Brad Fordham become managing director of Santander for Intermediaries. Both Miguel and Brad are tremendous assets to Santander and their knowledgeable, down to earth and approachable manner is very refreshing. I also read a survey recently that suggested people trust men with beards more, so that helps!