It makes sense to start with the markets this week, as while three-month Libor is still at 0.52 per cent, swap rates continue their inexorable rise.
1-year money is up 0.01 at 0.605 per cent
2-year money is up 0.04 at 0.92 per cent
3-year money is up 0.08 at 1.27 per cent
5-year money is down o.13 at 1.955 per cent
No wonder there are now a myriad of reports, comments and articles being published over the doubts cast on Bank of England governor Mark Carney’s interest rate stance.
Economic data continues to improve, unemployment has fallen and gilt yields rising all make for interesting reading.
We have however, seen a similar set of circumstances before the Euro crises took off with a vengeance so whilst things seem much more stable nothing should be taken for granted. It does seem however that with the mortgage market improving and government assistance set to be at it’s peak, next year’s lending figures could well be in the £175 – £200 billion region.
With the above in mind, it was interesting to see a recent survey that stated that 60 per cent of lenders believe the mortgage broking population would decline post-Mortgage Market Review as lenders invest in their branches.
While I have no doubt that there are more than a few lenders thinking this way, I still believe that the reality will be different. As proven time and time again, branches just cannot be relied on to do the levels of business required and the broker community will continue to strengthen.
Saying this I have also been following the reaction to comments by Countrywide’s financial services director Nigel Stockton around procuration fees and even toyed with making him hero of the week for his well-presented argument.
The whole debate needs to be had with MMR in mind, based on sensible maximum levels that can be attained by both networks and good directly authorised brokers – I see no difference. Those not providing quality applications would be paid at a reduced level, rather than everything being based on volumes.
In product news Halifax has some 90 per cent products through Legal & General available for loans up to £299,999 and priced at 4.49 per cent fixed for two-years. The first-time buyer version has no arrangement fees.
Leeds Building Society has launched an exclusive 95 per cent LTV product through LSL Property services which consists of a three-year fixed rate at 4.89 per cent with a free valuation and a £199 booking fee.
It was good to see that Buckinghamshire Building Society is coming back into the market next week, while it was also interesting to read that the new TSB is planning to distribute mortgages through brokers next year.
Generally there seems to be a good proliferation of products below the 2 per cent level where two-year products are concerned now with Woolwich, Halifax, Nationwide, Accord, Natwest and Skipton all competing in this area.
In the five-year fix space, Metro Bank is the latest to join in the sub 3 per cent brigade with its 2.89 per cent product and hot off the back of their award for best overall current account in the UK by the Mail on Sunday and financial research company, MoneyComms, overtaking First Direct, things are looking up for it.
With news that buy-to-let lending continues to increase, up 11 per cent in July according to the Council of Mortgage lenders, it is a shame that BM Solutions does not look like relenting on its recent interest cover change, which has hit areas like London hard.
Meanwhile, The Mortgage Works has been tweaking its online application process. There will now be a full list of packaging requirements at decision in principle stage and the case will not progress to valuation until all those are received.
Also note their continuing hard-line stance over proof of deposit, which should not be an issue, but worth remembering.