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Imla’s mortgage debate poured scorn on the idea of a housing bubble any time soon and booted out RICS’ suggestion of a pricing cap

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I quite like this no messing around and getting straight into the markets malarkey so here goes again. Three-month Libor is still at 0.52 per cent, and yes, you guessed it, swap rates have risen yet again like a light soufflé.

  • 1-year money is unchanged at 0.605 per cent
  • 2-year money is up 0.01 at 0.93 per cent
  • 3-year money is up 0.02 at 1.29 per cent
  • 5-year money is up 0.02 at 1.975 per cent

In terms of the overall news there are some juicy debates being had all over the place at present and it was interesting to attend the Intermediary Mortgage Lenders Association’s Great Mortgage Debate.

A couple of things stood out, one of them being that 100 per cent of people in the room believed that we were NOT going to find ourselves in a housing bubble any time soon.

As well as pouring more scorn on the Royal Institution of Chartered Surveyor’s suggestion of a 5 per cent cap on house prices, another pretty unanimous boot out, this does suggest that the reality is somewhat different when a nationwide perspective is taken.

I must confess to having had my doubts initially but while other commentators and economists have labelled the mortgage guarantee version of Help to Buy as “moronic” (harsh I feel), the key is that the scheme is not going to be backed up with ludicrous lending criteria and transaction levels still have a long way to go.

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We could still potentially see the reduction of the £600,000 level and remortgage exclusion before the final details emerge so watch this space.

It has been mooted that next year we are likely to see a £190bn lending market and so far I see little to suggest otherwise.

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Then we have the Mortgage Market Review. Where the advice piece is concerned I sense many lenders are still way off being ready, which means brokers importance is set to grow and in all the local hullaballoo many have forgotten about the European directive which could change things further.

Meanwhile, increasing swap rates have started to filter through and we have seen that lenders such as NatWest Intermediary Solutions, Halifax and BM Solutions increasing its five year fixes, with others looking like they will also.

Halifax’s five-year rate at 60 per cent is 2.99 per cent, while at 75 per cent it stands at 4.24 per cent or 4.99 per cent up to 85 per cent LTV.

Speaking of Halifax, it has announced that it has improved its underwriting decisions with fewer applications being declined online.

More will be passed for “manual review” especially self-employed applications so more human decisions can be made.

Clydesdale has withdrawn its five-year fix at 70 per cent with a rate of 2.89 per cent as well as the interest only version at 3.09 per cent. Its £1m and five-year fix product also bites the dust.

Interesting to see that Precise has stopped offering interest-only mortgages on its homeowner range due to low demand. With only 3 per cent of new business done on this basis it has made the decision that there is no point offering it which I understand, but is still a shame.

Skipton has reduced rates on a selection of 80 per cent and 85 per cent LTV products with an 80 per cent LTV two-year fix standing at 2.68 per cent and an 85 per cent LTV 3 year fix available from 3.68 per cent. Fees on these are £995 and available with free legals and valuation for remortgages.

Furness Building Society has a 90 per cent LTV product fixed for two years at a competitive 4.05 per cent with a £499 arrangement fee, while Kent Reliance has a new two-year fix at 85 per cent LTV priced at 4.19 per cent with a 0.5 per cent fee.

Remember they do have a flexible underwriting approach and are worth considering along with the excellent Aldermore for some of the more tricky cases.

 

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