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Market warch

Last week swap rates fell before climbing back to their previous levels. It has been a much busier week for new rates but no one has yet beaten Portman’s two-year fixed at 4.69%.

• One-year money is unchanged at 4.93%
• Two-year money is unchanged at 4.86%
• Three-year money is unchanged at 4.88%
• Five-year money is unchanged at 4.90%

Mortgage Express has launched some great buy-to-let rates which are available through Legal & General Mortgage Club. Rate of the week is a three-year tracker at 5.49% but the minimum loan size is quite high at £150,000. For smaller loans it also has a three-year tracker at 5.69%. It is great to see Mortgage Express move back into the forefront of the buy-to-let market with these rates.

Cheltenham & Gloucester has launched some fixed rates which are an improvement on the last ones. But it has also increased its application fees by £100 to £399. While this is understandable, after all everyone seems to be increasing their fees, sadly it gave no notice for this change. The email notification was sent at 4pm on November 30 for a change which took place at the end of the same day. This lack of notice earns it this week’s villain of the week.

Platform launched a great rate – a buy-to-let tracker. It is base plus 0.75% for three years and it comes with £500 cashback, which more than covers the £495 arrangement fee, but the rental calculation is based on the reversionary rate rather than the pay rate.

Bristol & West’s new portfolio includes an excellent three-year buy-to-let fixed rate at 5.59% with the rental calculation at the pay rate. It also has a new residential two and five-year fixed rates at 5.05% with free valuations and free conveyancing for remortgages.
Derbyshire has launched a five-year fixed rate at 4.94% and a 10-year fixed at 5.30%.

Three-month LIBOR is down 0.04% at 4.82%. Because the current base rate is 4.75%, the City thinks there is less than a 50% chance of a 0.25% increase in the next three months.

Twelve-month LIBOR is down 0.03% to 4.92% indicating the City thinks that base rate is set to increase by 0.25% in the next 12 months.

The Bank of England’s chief economist Charles Bean says “considerable uncertainty” surrounds the UK housing market. He also suggested UK interest rates may not have peaked. “Neither I nor my colleagues… know how the data will unfold… and it is the data that will determine where interests rates go,” he explained.

He also predicts that house prices could start to become more affordable.
“An average house currently costs approximately six times the average annual earnings,” he says. “It is likely that the ratio of house prices to earnings will probably continue to ease for a while, although a return to historical norms seems unlikely.”

Jonathan Cornell is technical director at Hamptons International Mortgages

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