View more on these topics

Marketwatch – March 2012

After a Budget that had more leaks than Thames Water, last week was busy, particularly for those working in the high net worth market. Thank goodness for the conditional exchange.

Swaps had a mixed week without moving too much, while LIBOR is still stuck. Three-month LIBOR is unchanged at 1.04%.

1-year money is down 0.01% at 0.97%
2-year money is unchanged at 1.29%
3-year money is up 0.02% at 1.41%
5-year money is up 0.05% at 1.74%

I am not having much luck with my heroes of the week. It seems that whenever I pick a lender, something happens in the following days to make me sigh, usually before the article is published. Last week’s hero, Nationwide, changed rates quickly and joined the merry throng by cutting its interest-only allowance to 50% LTV.

I suppose it was always going to happen and it was soon joined by Coventry Building Society, which no doubt will not be the last.

So 50% is now the new 75% as far as interest-only is concerned. It’s a shame, but I realise no lender can afford to be the last man standing on this and both mutuals have seen interest-only applications shoot up at higher LTVs.

There has been much negativity from brokers which I have seen reflected in various comments on social media and website forums. But before we get too downbeat let’s get some perspective.

These changes are tough, but not that different to when many of us started in the early 1990s – and we didn’t have proc fees then either.

While the job does feel more frustrating, in general lenders will still lend, even if it’s only on a repayment basis. It just involves more work, proper broking to put clients where they fit rather than following the cheapest product, and selling ourselves and, more importantly, the benefits of advice.

As an industry we seem to lack a consistent, unified approach to promoting what we do and I call on everyone to join together as much as possible to publicise the benefits of independent advice and that mortgages are still available.

To the Budget, and of course the biggest change was not just 7% Stamp Duty on properties over £2m, but 15% for those buying in a company name. This is common at this level in the big smoke and I know a few estate agents who have lost big money deals overnight.

For me, the chancellor missed out on an opportunity to properly reform Stamp Duty, for example, charging it similar to Income Tax, which would provide more help to those buying at the lower end such as first-time buyers, while raising the rate more fairly at the top end.

Meanwhile, Virgin Money has removed fast-track, which is good news. And Platform and Woolwich have increased rates.

Abbey has also announced rate changes with some decent notice. There are some excellent buy-to-let rates and service levels are holding strong.

heroes&villains

Hero of the week
With tongue firmly in cheek, it’s HSBC for its solicitors panel. The head of The Law Society has written to members saying it is causing delays. This will help push clients back to brokers to get proper advice.

Villain of the week
NatWest for pulling interest-only for brokers last week. Even if it is only temporary, the nature of interest-only means that borrowers need advice, so to offer it through a potentially non-advised route is crazy.

Recommended

Data for February shows another spike in year-on-year gross lending

Gross mortgage lending in February was almost identical to the previous month but increased significantly year-on-year, according to the Council of Mortgage Lenders. Lending in February was an estimated £10.7bn, relatively unchanged on January’s £10.65bn but 14% higher than February 2011. Bob Pannell, chief economist at the CML, says that while a seasonal decline is […]

Business borrowers need fair treatment

My last thoughts on the Mortgage Market Review before we submit our response to the Financial Services Authority concern a niche group that is subject to potentially significant changes – small business borrowers.

Planning reform unashamedly backs building

The National Planning Policy Framework is published today amid criticism it gives a free pass to steamroller over England’s green and pleasant land.

Clients advised to avoid HSBC to prevent delays

Estate agents have started to advise mortgage borrowers against using HSBC because of its recent decision to cut its conveyancing panel to just 42 firms, says The Law Society. The lender made the decision in January and although customers are free to choose their own solicitor, HSBC will still use a panel firm for its […]

Europe: Nursery slopes

After a flat year for European equities, in which the Artemis European Growth Fund outperformed, manager Philip Wolstencroft is (cautiously) optimistic about 2016.

Newsletter

News and expert analysis straight to your inbox

Sign up