“More measured than rapid” was the quote from Bank of England Governor Mark Carney when he described the recovery taking hold of the UK as he stuck to his guns on forward guidance.
His speech was well-delivered and he reiterated that, slightly contrary to markets, he thought interest rates would stay lower for longer.
One of his comments that was particularly interesting was around banks capital ratios, as he indicated that banks meeting a 7 per cent threshold by the turn of the year could see their capital controls eased in a move which he thought could lower required holdings by £90bn and thus boost bank lending.
With this, Funding for Lending, Help To Buy parts one and two could we be on the threshold of a lending boom next year?
One note of caution however, he also said he was “fully prepared to deploy” new tools such as lending restrictions and increased capital requirements on mortgages in the event a housing bubble begins to emerge.
In the markets, three-month Libor has finally moved a tiny bit, up to 0.52 per cent while swap rates have stayed in vaguely similar positions with a slight downward drift in parts, too early to see if Carney’s speech had any further effect.
- 1-year money is unchanged at 0.585 per cent
- 2-year money is down 0.01 at 0.83 per cent
- 3-year money is unchanged at 1.11 per cent
- 5-year money is down 0.04 at 1.745 per cent
Clydesdale has tried to become a little easier to deal with where internet bank statements are concerned and there is no longer a requirement to ensure that ‘http://’ appears at the start of printed bank statements. Sort code, account number and customer name should still be evident. Little things like this help in an increasingly online world and it always seemed contradictory that banks who push for online statements were then difficult in accepting them for mortgages.
Halifax has simplified its shared equity criteria and now works off a standard rate of 3 per cent when calculating the payment on the equity loan amount payable.
Also on the criteria front, Newcastle Building Society will no longer accept applications where the maximum age of the borrower is over 75 at the end of the term. Good job we don’t have an ageing population…oh!
Skipton will now accept flats over five storeys high and no longer put restrictions on the number of units within a block. All must have a lift and ex-locals are still a no no.
Finally on criteria, Investec Professional Mortgages can consider up to 100 per cent of bonuses and work on the most recent years income for self-employed applicants, while Aldermore has stopped using audit valuations on the larger loans which is good news.
Coventry is making more changes with residential and offset flexi-fixes going and a new range of no arrangement fee products. These start at 2.79 per cent for a three year fix at 65 per cent LTV, while at 80 per cent its two year fix is 3.09 per cent and at 85 per cent LTV it is 3.35 per cent. All have just the £199 booking fee.
Scottish Widows is continuing to improve products and becoming a player again especially at high LTVs. Meanwhile they have some new 60 per cent LTV products starting at 1.99 per cent for a two year fix for professionals and 2.14 per cent for everyone else. Both have £1,499 fees and are offset friendly.
In the buy-to-let world, Accord, (if you have everything including the kitchen sink), has released some five year fixes from 3.89 per cent with a 2.5 per cent fee, 4.14 per cent with a £2,300 fee up to 4.44 per cent with a £1,800 fee.
Finally, like something out of the literary classic War of The Worlds, a certain weed, not quite so red, has been causing havoc across the country. Japanese Knotweed was rarely mentioned a few months back and now most brokers and valuers seem to be avid horticulturalists. Is it me or does this whole thing seem to have become a little overgrown? Sorry, overblown? Anyway, the point is homeowners need to be made aware of this potential issue and lenders need a clear policy on the dreaded weed. Victorians eh? What did they ever do for us?