Swap rates show the rough costs to a lender for buying a tranche of money to lend as a fixed rate. They continued their rise this week.
One-year money is up 0.08% to 4.79%
Two-year money is up 0.12% to 4.96%
Three-year money is up 0.13% to 5.05%
Five-year money is up 0.12% to 5.12%
Rates have surged over the past month. There is no scope for cuts unless someone wants to start the fiscal year with a lot of new business at a loss.
Portman's two-year fix at 4.49% and five-year fix at 4.99% have been pulled. Portman's respect for the intermediary market is shown by its closure process – two days to supply a list and three weeks to get applications in.
This respect is not shown by Alliance & Leicester which continues to reprice at 24 hours' notice. Do they think intermediaries have clients waiting in the offices?
Rate of the week is still Northern Rock's two-year fixed rate at 4.49%. There are rumours it is running out fast, so grab it while you can. Irish Permanent has launched a great buy-to-let rate at 0.99% over base for three years at 85% with the rental calculated at 125% of the pay rate.
Villain of the week is Ruth Kelly for her speech at the CML lunch. Light sleepers heard a monotonous rehash of the Miles and Barker reports interspersed with Labour spin. The highlight was when the lights went out.
A good way of working out what the City expects base rate to be within a given period is to look at LIBOR.
Three-month LIBOR is up 0.03% at 4.40%. The current base rate is 4%. So the City is expecting another 0.25% in the next three months. Twelve-month LIBOR is up 0.07% to 4.82%, indicating a 0.75% increase in the next 12 months.
The Monetary Policy Committee resisted pressures to raise the base rate so expect an increase in May. The MPC faced a tough decision, trying to keep a handle on consumer debt and the housing market whilst supporting exporters hit by the strong pound.
Jonathan Cornell is technical director Hamptons International Mortgages