Doom-mongers are out in force again, mainly around the words ‘property’ and ‘crash’. We must not join the bandwagon
First of all, it would be remiss of me not to mention the former editor of this very publication, Paul Thomas. Paul stamped his personality across the magazine for two years and, together with his team, did a fantastic job in some difficult circumstances to keep Mortgage Strategy as relevant and well read as it always has been.
No doubt the next incumbent will continue in the same vein but, for now, I am sure all of you will join me in raising a glass to Paul and bestowing a well-deserved ‘Hero’ award on the Welsh Writing Wizard.
The doom-mongers seem to be out in force once more around some pretty shady economic news and, of course, Brexit in general, but mainly around the words ‘property’ and ‘crash’. I assume those in the industry predicting this are advising all their clients not to buy?
Although we all have concerns about the market, it is important to not jump on any bandwagons but continue to advise our clients carefully, pointing out all the relevant risks without scaremongering.
While there will be, hopefully, an easing of house-price growth – seen at the top of the market as higher stamp duty rates take effect – there is still every indication that prices will hold steady, barring any major event.
Brexit is, of course, a real risk, especially in the short term. However, as an eminent estate agent wrote last week, it could also prove to be one of the best opportunities in a while for buyers to make some cheeky offers.
In the markets this week, three-month Libor is still at 0.59 per cent while swap rates have slunk down again.
2-year money is down 0.06% at 0.80%
3-year money is down 0.07% at 0.89%
5-year money is down 0.08% at 1.05%
10-year money is down 0.09% at 1.44%
The top news comes from broker-friendly Kent Reliance, the latest lender to introduce a product transfer scheme, which is definitely hero territory in my book.
It has made it pretty easy for brokers with its new product transfer form and will pay a proc fee of 0.25 per cent.
It is good to see Kent Reliance continuing to support brokers by offering a simple retention solution. As a specialist lender often dealing with complex cases, it must ensure its customers continue to get the best advice. The tide is getting stronger; other lenders, take note…
More good news from the equally friendly Skipton Building Society: it has axed its £500,000 loan cap for first-time buyers.
Rate-wise, we could be entering another mini rate war, with speculation over two-year fixes below 1 per cent. Yorkshire Building Society has come closest with its 1.14 per cent product.
Santander, which seems to be turning around applications incredibly quickly, has some first-time buyer exclusives at 90 per cent LTV from 2.49 per cent with a £999 fee and a 95 per cent LTV five-year fix at 4.64 per cent with no fee. It has also made other rate reductions up to 0.3 per cent.
NatWest has cut five-year fixes starting from 2.25 per cent with a £995 fee, while Accord has also reduced a swathe of rates and is offering new five-year fixes to 85 per cent LTV from 2.49 per cent with an £845 fee.
Nationwide has changed its income multiple cap for sole applications above 85 per cent LTV, reducing it to 4.5 times gross disposable income. It has also reduced selected fixed and tracker rates.
Leeds Building Society has launched more interest-only products, with a two-year fix at 1.6 per cent to 50 per cent LTV and a ‘part and part’ mortgage to 75 per cent LTV at 1.7 per cent. Both have a fee of £1,999.
In the high-net-worth world, Harrods Bank has introduced a 1.99 per cent two-year fixed deal with a 0.5 per cent arrangement fee for those borrowing over £1.5m. The fee is 1 per cent for borrowers with foreign income.
Finally, I liked the “No, no… no limit” email from Hinckley & Rugby reminding us “there is no limit to the overpayments customers can make” on their variable or short-term fixed products. Marketing written in a chatty, down-to-earth style – we like.