Hopefully, Northern Rock will use brokers to distribute some of its new lending.
There are plenty of first-time buyers who could afford to buy property if they could only get mortgages.
The spiral of banking despair is closely linked to house prices. If we can get more first-time buyers into the market this may stop prices falling so at least lenders will have more desire to lend and won’t need to commit so much capital to cover write-downs.
Despite Prime Minister Gordon Brown’s call to ban 100% LTV mortgages I think there is still a case for them, even in this market.
Scottish Widows used to provide these kinds of loans for professionals such as doctors and solicitors to help them get on the property ladder. Each case was individually underwritten and I bet the performance of these loans is better than most at the moment.
I was sad to see the news about Ashdown Lyons. It was an excellent firm that served the industry well. I am sure we all wish Jeremy Lyons, Robin Johnson, Simon White and the rest of the team the best of luck for the future.
Meanwhile, it was good to see another update from Checkmate Mortgages. It is busy doing consultancy work. Seeing firms adapt to use their technology, skills, relationships and initiative to do other work is wonderful. Exact is another great example of this.
These firms have looked at what they can offer rather than just relying on lending, which lack of funding prevents them from doing. It was rather scary to see HSBC launch a sub-4% five-year fixed rate. This is part of its special range and features a maximum LTV of 60% and fee of £999.
But if HSBC can offer this kind of rate, what’s stopping other banks? The closest broker product is Woolwich’s five-year fixed deal at 4.49% with a £995 fee.
Products such as HSBC’s will get borrowers off SVRs and this will benefit them, lenders and brokers.
Northern Rock reduced a number of its fixed rates. The two-year fixed rate is now 3.89% up to 65% LTV with a £995 fee. With its flexible features this looks pretty good value. The lender’s five-year flexible fixed deal is at 4.89% up to 75% LTV with a £995 fee.
Cheltenham & Gloucester changed the policy on its buy-to-let scheme to introduce a new minimum earned income level.
It also trimmed its buy-to-let fixed rates. There is now a three-year fixed rate at 4.99% with a 2.5% fee at 60% LTV and a 75% LTV version at 5.29% with the same fee.
All the lender’s buy-to-let trackers have gone up by 0.4%. The 60% LTV three-year buy-to-let tracker is now at base rate plus 3.99% and the 75% LTV version is at base rate plus 4.29%. Both these come with a 2.5% fee.
At 4pm on Friday two of the HBOS stable of lenders announced reprices within 15 minutes of each other. Halifax and Bank of Scotland gave brokers until 8pm on Friday night to key applications.
Then BM Solutions shut down its One Minute Mortgage system for most of Sunday. Fortunately, this was back in action before Songs of Praise started.
The Mortgage Works announced a reprice on Monday at 11am, giving a leisurely three hours for brokers to submit decisions in principle. This seems civilised compared with some changes in the past couple of months.
I think there were a few system problems and TMW kindly extended the deadline so DIPs received at any stage on Monday would be honoured as long as the full applications were keyed by noon on Tuesday.