Swaps continued to creep downward but sadly it is too soon to see anyone reprice downwards.
- One-year money isdown 0.07% at 4.49%
- Two-year money is down 0.07% at 4.40%
- Three-year money is down 0.06% at 4.41%
- Five-year money is down 0.07% at 4.43%
Cheltenham & Gloucester withdrew its fixed rates on Friday August 26 announcing last Tuesday that the new rates would be available on Monday September 5. I do not think this is good business practice. We had no idea what the new rates would be, so had no idea how to present this to our clients. Clearly for some clients, a 0.1% increase may not make it worth cancelling previous engagements to fill in forms to get them in on time. But a 0.5% increase may make this worthwhile. Leaving us clueless does not help us look good in front of clients.
The Woolwich launched some great rates, the highlights being a pair of online-only two and five-year fixed rates with a remortgage package. The two-year fixed rate is 4.49% and the five-year fixed rate is 4.69% with a 445 application fee. Both of these are available up to 95 % LTV with a maximum of 500,000 with no higher lending charge. When you factor in the remortgage package they look great value, especially at 95% LTV. No typographical errors in the launch email either!
Bank of Scotland continues to improve its already good range. It now has self-cert fixed rates starting at4.89% available to 75% LTV, with reduced rates on self-cert trackers and buy-to-let term trackers at 5.19%.
UCB Homeloans has repriced its range and now has a self-cert three year flexible tracker at just 0.69% over base with no overhang. It also now has a buy-to-let three-year tracker product at 0.79% over base rate with no overhang.
Three-month LIBOR is unchanged at 4.59% so the market sees little chance of a base rate change in the next three months. Twelve-month LIBOR is down 0.03% at 4.54% indicatingthe City thinks there will not be further decreases in the base rate in the next 12 months.
I was interested to see comedian Nick Hancock has left They Think It’s All Over
to take a job as marketing director of a mortgage broker. He starts at south Yorkshire-based Earth Mortgages, founded by two of his friends, in September. Earth Mortgages sounds like a specialist ethical broker but after looking at its website and seeing the monster 4% fee, I assume it got the name as its fee costs the earth.
Figures from property website Hometrack show house prices fell again in August with the interest rate cut at the start of the month appearing to do little to revive the market. The average cost of a property in England and Wales fell by 0.1% in August. Prices fell by 0.2% in July. This is the 14th month in succession that property prices have gone down. Hometrack says prices have now fallen by 3.7% over the past year. Interest rates were lowered to 4.5% on August 4. The average cost of a property in England and Wales is now 161,000, almost 7,000 less than in June 2004.
Figures from the British Bankers Association for the number of new mortgages app-roved for house purchase by the banks in this country were 6% lower in July than a year ago. The association’s members approved just 65,611 new home loans.
And the latest set of figures from the Bank of England show mortgage lending rising at its slowest rate since January 2002. Lending in July rose at a yearly rate of 10.4%. Last month lending by banks and building societies rose 6.45bn, the lowest cash increase for a little over three years.
However, separate figures on mortgage approvals – loans agreed but not yet made – suggest the property market will be stable in the coming months. Last month they rose to 97,000, back to the levels of a year ago and similar to the levels of the previous three months.
Jonathan Cornell is technical director at Hamptons International Mortgages
Heroes of the week are the lenders who have not repriced their fixed rates upwards in the past month or so. These include Halifax with its excellent two-year fixed rate at 4.29%, available to 90% LTV.Villains are Portman and The Mortgage Works which have cut their surveyor panel to just five firms. They have also asked brokers and surveying firms to inform them of challenges to the rental assessment.