Market Watch: Cameron takes centre stage with EU talks


Cameron has taken centre stage, with the ramifications of the UK leaving the EU noted as one of the main rising risks

Last week saw the great, the good and the questionable descend on London’s Grosvenor House for the Mortgage Strategy Awards. Like the Grammys, there was more than a little glamour on the red carpet, some great performances and a few extraordinary shapes being thrown on the dance floor.

Although these days it takes me a day longer to recover, such events always restore my faith in the fact we have some wonderful people in our industry. Big congratulations to all the winners, those nominated and those continuing to strive for excellence.

Talking about striving, our prime minister, David Cameron, looked a little stressed of late after battling with his counterparts in Europe for some semblance of a deal that will avoid a Brexit. Of all the issues around at present, this has taken centre stage, with the ramifications of the UK upping sticks and leaving the EU being noted as one of the main rising risks.

Elsewhere, the Office for National Statistics’ latest house price data shows prices have continued their inexorable rise, increasing by 6.7 per cent in the year to December 2015. This represents a slight slowdown from November but is still a high figure. Many buyers will continue to be frustrated as they watch house prices move further from their grasp, especially as there is no sign of wage growth keeping up.

While Government schemes such as Help to Buy will undoubtedly continue to give builders the confidence to build and help a fair few new buyers, demand continues to fan the flames under the housing market.

At the same time, data from the English Housing Survey shows private renters now outnumber homeowners in London for the first time in over a decade. It is no wonder landlords are seeing their best returns for a while.

It all goes to show the importance of the private rental sector to the market as a whole. The concerted attacks on landlords, whether you agree with them or not, all serve to push rents up further, causing more issues.

In the markets, three-month Libor is stuck at 0.59 per cent while swap rates have bounced up.

  • 2-year money is up 0.05% at 0.78%
  • 3-year money is up 0.09% at 0.86%
  • 5-year money is up 0.10% at 1.02%
  • 10-year money is up 0.11% at 1.45%

Nationwide has made a raft of changes and now accepts homes with restricted covenants. It has also introduced a “genuine bargain price lending” option for vendors who want to sell their properties at less than market value for a good reason (for example, inter-family sales). It will then lend on the open-market value. Also welcome is the fact porting can now be done online for existing customers through intermediaries.

Barclays has made changes to its interest-only policy and now needs a minimum of £300,000 – together with a requirement for £300,000 equity at the end of the loan. Well, you do the maths.

Santander has provided more information on its MCD changes and, where foreign currency is concerned, will continue to lend to those paid in US dollars, euros, Swiss francs or UAE dirham. It has also done away with its separate retained property form and now, sensibly, brands all mortgages as Santander. On interest-only, the £150,000 equity buffer will now apply at the end of the term on part-and-part applications.

Meanwhile, Newcastle Building Society has reduced rates on its All in One 90 per cent and 95 per cent LTV product range by up to 0.2 per cent, which come fee free and include all standard legal costs, such as searches.

Tesco has continued gearing up for intermediary launch with a strong team that definitely has an ING taste to it. We look forward to welcoming it to the market.

Finally, the Council of Mortgage Lenders and British Bankers’ Association boards have voted in favour of a proposed mega-merger, which, if it goes through, will change the face of the trade body landscape.