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Marketwatch – June 2012

The rain in Spain stays mainly, well, everywhere at the moment, as eurozone leaders run around like headless chickens trying to sort out what to do next.

Greece is a sideshow compared to the potential expensive scenario of having to bail out the fourth largest euro economy.

Meanwhile, talk in the UK is about more quantitative easing, with some also suggesting that the Bank of England base rate should be cut further to just 0.25% or potentially 0% to kick the economy into some sort of action.

Whatever happens, we are approaching a summer period where many will hope the feel-good factor generated by the Queen’s Jubilee will be amplified by good European Championships and Olympics. We can but hope.

LIBOR is still below 1%, while swap rates are pretty much the same as last week. Three-month LIBOR is down at 0.99%.

1-year money is unchanged at 0.93%
2-year money is unchanged at 1.18%
3-year money is up 0.01 at 1.21%
5-year money is up 0.02 at 1.395%

Yorkshire Building Society has cut rates on its 90% LTV products by up to 0.25% while Yorkshire and Clydesdale banks have waived arrangement fees for clients taking out a new mortgage or switching to the banks before July 14. There will also be rate reductions on their high LTV products.

I was interested to see that David Finlay, managing director for intermediaries at Barclays, has assumed responsibility for the bank’s direct mortgage channel on an interim basis as well. This is testament to Finlay’s ability – he has enormous respect in the broker community.

On a non-mortgage theme, well done to Aldermore for launching new business savings products. Offering decent rates and an innovative service, this will hopefully help many small to medium-sized firms that feel their current banking arrangements leave a lot to be desired.

There have also been several news items highlighting that almost half of European lenders expect a drop in lending in 2012. While such headlines do nothing for confidence, I was heartened to read the excellent article from Countrywide’s financial service director Nigel Stockton in Mortgage Strategy last week.

I particularly liked his comment that “more sustainable value is created in downturns than in a positive economic climate”.

There is still money to be made from mortgages, especially if you are dealing with customers professionally, charging a fee for your services and ensuring they are adequately protected. It is harder work than ever, but nothing of value ever comes easily.

Finally, congratulations to Nationwide’s BDMs, who were voted the best quality by brokers in Q1 in a BDRC Continental survey. No mean feat with criteria and rates changing by the minute.

heroes&villains

Hero of the week
The European Monetary and Economic Affairs committee, after a key vote ensured the UK was exempt from any buy-to-let regulation. Well done to trade bodies for managing to keep the sector out.

Villain of the week
Bogus claims firms and those that sell them data. Chatter on this topic is worryingly prevalent. They need to be stamped out and fined for false claims. They help no-one and the cost in monetary terms and time is unsustainable.

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