This week that awful Monday morning feeling just passed me by.
The sunshine had something to do with but there were other reasons to be cheerful, namely news that two new mortgage lenders –Aldermore (to be featured in the June edition of Lending Strategy) and Precise –are entering the market.
True, as someone from the Council of Mortgage Lenders recently admitted in a candid moment, only about half a dozen of its members are lending in any significant volume and with the best will in the world the new entrants aren’t going to see mortgage lending make a massive leap forward next month.
But after two years in which we have seen 10 building societies and a lot more specialist lenders fall by the wayside, at least the launch of Aldermore and Precise are a step in the right direction, especially as both of them, and Precise in particular, will be lending in the buy-to-let market.
Even the announcement , also on Monday morning, of £6.2bn in public spending cuts didn’t dampen my partisan spirits though, of course, the demise of useless quangos and cutting public sector jobs may well have a marginal negative impact on arrears and possessions figures in the months to come.
I must admit that I initially thought that the scrapping of the Child Trust Fund, might raise the ire of the building society sector, both because societies are keen to encourage the saving habit among the young and because, I speculated, all those £250 contributions by the tax payer and supplementary deposits by parents and relatives were helping them to swell their coffers and compete in the mortgage market.
Speculation, however, is one thing and the reality is rather different. “This is disappointing as CTFs are a very good way of getting children into the habit of saving”, is all the Brian Morris, head of savings at the Building Societies Association, could muster by way of a response in the Daily Mail.
By way of an explanation, it was suggested to me by one of his colleagues that the Child Trust Fund had been given up as a lost cause with the change of government and besides, I was informed, “TCF cash deposits only account for 0.2% of building society savings”, so that’s all right then.
In hard cash that figure equates to around £600m which won’t suddenly disappear and as the chief secretary to the Treasury, David Laws, says, stopping CTF payments to newborns from the end of the year – and the top-up payments to children when they reach seven – will save £520m. Some £320m will be saved in 2010 and 2011, rising to £520m in 2011-12.
Obviously some parents will rue the day that Gordon Brown’s gift horse to the young was reined in but given that it was probably only appreciated by the financially savvy middle classes (the majority of parents invested in equities and 25% did nothing at all), it’s unlikely that this measure will contribute much to child poverty while it will contribute just a little bit to reducing the national debt.