The CML has reported on 320,000 ‘missing movers’, some of whom, presumably, are unable or unwilling to afford to do so
It seems that things at the Bank of England are about as calm as a thunderstorm in the middle of the Atlantic Ocean, with some deep divisions over the future direction of interest rates.
After the “No increase”, “Yes, maybe an increase”, mixed messages of late, MPC member Gertjan Vlieghe has waded into the debate, stating: “This is an environment where a premature hike would be a bigger mistake than one that turned out to be slightly late.”
It appears the disagreement has become a very public one and Mr Carney has not been helped by the fact that BoE employees are on the verge of striking for the first time in 50 years after a derisory 1 per cent pay rise offer. It looks set to be a long, hot summer for the governor.
Meanwhile, an interesting recent report from the CML asks: “Where have all the movers gone?” It suggests that around 320,000 “missing movers” are one of the main reasons behind the shortfall in annual transactions.
While some of this can be explained by a reduction in households with mortgages and various other reasons, the CML still puts 140,000 down to absence of movement from those with mortgages due to either a lack of available places to move to or a lack of sufficient funds and equity.
Add this to the fact that stamp duty is still a burden for most, especially in the higher brackets, and it seems that thousands who may wish to move are either unable or unwilling to pay the cost to do so. This has a knock-on effect on social mobility and the economic environment.
In the markets, three-month Libor is still at 0.3 per cent while swap rates have moved upwards again, so get those fixed-rate applications in!
2-year money is up 0.08% at 0.67%
3-year money is up 0.11% at 0.78%
5-year money is up 0.16% at 0.97%
10-year money is up 0.21% at 1.35%
In mortgage product land, Accord will now pay retention proc fees to the full broker market at 0.3 per cent. This is great and I really feel that we will soon see fees rise in line with the additional levels of work involved as more lenders start to understand what brokers do for this.
Accord has also introduced two 90 per cent LTV products at 1.99 per cent and 2.14 per cent as well as cut rates on all 95 per cent LTV deals by up to 0.15 per cent.
HSBC has cut rates again and has a two-year tracker at 0.99 per cent with a £999 fee and no ERCs. It has also made reductions to two-year and five-year fixed-rate fee-free mortgages.
Meanwhile, Nationwide is the first lender to increase two- and five-year fixes, probably due to higher swap rates.
Halifax has added a £500 cashback ‘treat’ on all mortgage products to help with costs.
Digital Mortgages from Atom Bank has some new rates out with two-year fixes from 1.34 per cent and five-year fixes at 1.9 per cent, both at 60 per cent LTV. Its 90 per cent LTV products start from 2.04 per cent with a £900 fee.
NatWest has new products including a 60 per cent LTV deal at 1.15 per cent with a £995 fee and a 90 per cent LTV first-time buyer deal at 2.69 per cent with no fee and £750 cashback.
Leeds Building Society has refreshed both its Welcome Mortgage range, starting from 2.17 per cent at 85 per cent LTV, and its Holiday Let range, starting from 2.09 per cent at 60 per cent LTV.
Family Building Society has made rate changes with two-year fixes from 1.99 per cent and a semi-exclusive three-year fix at 2.94 per cent to 80 per cent LTV with a fee of £999.
There is also a semi-exclusive BTL three-year fix at 2.99 per cent to 65 per cent LTV with a £999 fee. It has reduced its limited company product fee from 1.5 per cent of the advance to 1.25 per cent, with the minimum loan raised from £75,000 to £100,000.
Aldermore has updated some criteria and no longer requires separate legal representation on residential and standard BTL applications.
Precise has reduced its minimum loan size on BTL products to £50,000 while The Mortgage Lender has lowered its five-year fixed-rate products by up to 0.71 per cent.
Heroes & Villains
Hero of the week
Masthaven Bank – for well-thought-out products, an easy DIP system and its recent move into residential.
Villain of the week
Near-histrionic scaremongering over technology or Brexit. One is an opportunity; the other may not happen.
Andrew Montlake is a director at Coreco