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.
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.