I am enthused by the passion that comes out of mortgage conferences – a pity the same can’t be said about politics
I was at the L&G Mortgage Club Live Conference last week, which was one of the best events I have attended in a long time in terms of content and presentation. I particularly enjoyed hearing from Metro Bank chief executive Craig Donaldson, who was one of the speakers.
He earns himself the accolade of my ‘Hero of the Week’ for speaking incredibly eloquently about the customer and, on the subject of retention fees from lenders for brokers, stating: “Lenders can’t be your best friend at the front door and your enemy at the back door.”
The conference taught me there is a lot going on behind the scenes with many lenders and brokers in terms of building better technology, better processes and more understanding of the customer service journey and expectations. I am always enthused by the positivity and passion that come out of these events.
The same cannot be said of the political world at the moment. The consequences of a hard Brexit were brought home to us with Marmite-gate last week, which had me panicking at least (though, to be honest, I prefer Vegemite).
It is important to remember that all the political posturing is just the two sides getting ready to negotiate, and any discussion like this will always start with “I want everything” versus “You are getting nothing”.
That said, the markets do not like this kind of thing and we have seen sterling plummet. Coupled with the after-effects of quantitative easing and a low interest rate policy, it looks like we will finally see the kind of inflationary pressures many have been expecting for a while. To cut rates again this year looks incredibly foolhardy. Perhaps the next move will now be upwards.
Elsewhere, the housing bubble pop-predictors look wrong yet again, as prices bounce back and buyer confidence returns. With supply as it is we have a way to go before a correction finally takes place.
Meanwhile, there has been speculation that Chancellor Phillip Hammond may be preparing to change at least one aspect of the tax treatment where buy-to-let is concerned. It seems the Government has far exceeded its aim of reducing the buy-to-let market by 20 per cent or so. To continue on this path with the Prudential Regulation Authority changes on top could have too big an effect on the private rental sector.
In the markets, three-month Libor has risen to 0.39 per cent while swap rates have smashed upwards on the back of hard-Brexit talk and the threat of inflation.
- 2-year money is up 0.12% at 0.56%
- 3-year money is up 0.15% at 0.59%
- 5-year money is up 0.20% at 0.69%
- 10-year money is up 0.25% at 1.01%
In the product world, we have seen the usual raft of changes this past week. The lovely Furness Building Society has launched a 95 per cent loan-to-value product priced at 3.98 per cent fixed for five years with no product fee, as part of a new range starting at 2.18 per cent to 80 per cent LTV. This is exactly the type of stuff you want from a building society.
Elsewhere, Halifax has added a £500 cashback on certain fixed and tracker remortgage products, while Nationwide has reduced a number of rates, with two-year fixes falling by 0.2 per cent. Accord has cut its rates further, with some products reducing by up to 0.23 per cent and new fixed rates introduced at 90 per cent LTV.
Clydesdale Bank has a new range of products as well, starting from 1.29 per cent for a two-year fixed at 60 per cent LTV and five-year fixes from 1.99 per cent.
Meanwhile, Barclays has pointed out there are £38bn-worth of mortgage product maturities forecast for the remainder of this year. Those of you not tracking your clients’ rate maturities need to get involved now. There is lots of business to be had from clients who need advice.
Finally, Bank of Ireland is the latest lender to offer retention procuration fees for intermediaries and will pay 0.25 per cent – so a massive well done to it. All lenders will follow.
Andrew Montlake is director at Coreco Group