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Market Watch

Last week, swaps started to fall but then rose towards the end of the week and are now at a six-month high.

  • One-year money is up 0.04% at 4.74%
  • Two-year money is up 0.04% at 4.76%
  • Three-year money is up 0.05% at 4.79%
  • Five-year money is up 0.04% at 4.80%

The increases meant another frantic week of rate withdrawals. It’s getting pretty difficult to keep track of what needs to be where and by what deadline.

But Northern Rock kept its word. At the start of the week it issued a product warning and a couple of days later it increased its rates giving a healthy three working days’ notice for applications to be submitted.

Northern Rock has increased its flexible fixed rate range by 0.1%, so its core two-year flexible fixed rate is now at 4.69%

And well done to The Derbyshire for putting its current turnaround time on its rates bulletin. It is now taking on average a very speedy 10 working days to issue offers. It has just launched a 4.79% three-year buy-to-let rate with a 1.5% fee, and a 5.19% three-year buy-to-let fixed rate with a 495 fee.

I have heard strong rumours that Cheltenham & Gloucester fixed rates are going to be increased but so far I’ve not had an official communication on the subject. If you have any C&G fixed rate applications, I recommend you try to send them off as soon as possible.

Intelligent Finance was obviously keen to tell us about its new fixed offset mortgage as I got three emails saying exactly the same thing. It is available up to 85% and 500,000. There are penalties during the two years but only for full redemption. The arrangement fee is 499.

The Mortgage Works has kept its three-year buy-to-let fixed rate with the 1.5% fee at 4.79%. Most of the rest of its buy-to-let and self-cert fixed rates have been increased by 0.1% to 0.2%. It’s good to see yet another lender giving a decent notice period.

It’s also pleasing to see a lender adapting its systems and processes in line with brokers’ needs so I was impressed to receive an email from The Woolwich saying that it is extending the opening hours of its mortgage processing centres as it is receiving more callsUCB has increased its two-year flexible fixed self-cert rate but it has managed to keep all its other buy-to-let and self-cert rates at the same level.

Plaudits must also go to The Mortgage Business which has now given us direct access to its underwriting teams, simplifying the telephone process.

The Skipton has increased rates on two deals – its three-year fix at 4.79% and its five-year fix at 4.84%. These did not have a particularly long life as they were only launched the previous week. But at least The Skipton was able to give almost a full week’s notice for us to send in applications.

The West Bromwich has increased its fixed rate range by between 0.1% and by 0.2%. I wish it was a bit more sensible with its email update policy. It seems strange to send a blank email with just an eight-line disclaimer and then two documents with the wording when all this could be fitted onto one page. This sort of thing has implications for our printer paper.

Over in the City, three-month LIBOR is up 0.01% at 4.62%. The base rate is now 4.50% so the market sees little chance of a change in the base rate in the next three months.

And 12-month LIBOR is up 0.03 at 4.72%, indicating the City thinks there could well be a 0.25% increase in the base rate in the next 12 months.

As was widely expected, the Bank of England’s Monetary Policy Committee kept the base rate at 4.50%. I don’t think we will be seeing any base rate changes until a few months into the new year.

Jonathan Cornell is technical director at Hamptons International Mortgages

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