As selfcert.co.uk goes live, and promptly crashes due to high demand, the FCA should remind lenders of the transitional rules
No sooner had we got ourselves ready for a potential rate rise than, you guessed it, whispers started about a possible cut instead. As the world looks to have gone crazy once more, US rate setters must be wondering if their innocent upwards tweak last month has shown that markets cannot even cope with that.
It is pretty frightening stuff and, while I would temper it by saying you should look past the sensationalism of the headlines and comments, there are undoubtedly some deep-rooted global issues that need to be dealt with.
The big concern is that the means of dealing with all of this may have been used up already and banks, although in a much better state than previously, would struggle with another shock this early. This is leading investors to panic, which means others panic, talking themselves into a crisis.
I suspect things will even out but as oil slides towards $20 a barrel, China continues to tank and other countries feel the chill, it is going to be a bumpy ride for a while.
However, a message for my fine-feathered broker friends: this is all completely out of our control and therefore not worth worrying about. Indeed, we look set for no rate changes in the foreseeable future following Bank of England governor Mark Carney’s latest inevitable U-turn, so it is very much a case of “As you were.” Business is buoyant and looks set to continue in a similar vein.
The biggest industry news this week has been the controversy surrounding the launch of website selfcert.co.uk. Based somewhere in the Czech Republic to get around our rules, it is offering self-cert loans reportedly at rates of 2 per cent above base.
Demand was so high at launch that the website crashed and it has said that, with 4,000 people registering an interest, it will not be able to provide for everyone and has suspended new lending.
Whatever your opinion, it raises some important questions. Are people just mad, or does this show that too many borrowers are left feeling like third-class citizens and not catered for in this post-MMR world? The FCA should be taking note. Transitional rules, anyone?
In the markets this week, three-month Libor is still 0.59 per cent while swap rates have, unsurprisingly, slid down with the price of oil. Five-year money is at its lowest since June 2013.
2-year money is down 0.07% at 0.85%
3-year money is down 0.09% at 0.98%
5-year money is down 0.11% at 1.23%
10-year money is down 0.12% at 1.66%
Meanwhile, Barclays hopes to up its presence in the new-build sector with a bespoke range of products, with rates from 2.04 per cent for a two-year tracker, 2.09 per cent for a two-year fix and 3.09 per cent on a five-year fix, all with fees of £999 and up to 85 per cent LTV. It will do assignable contracts under certain conditions, which is most welcome. If we are to meet building targets, more lenders must support new-build properly.
Elsewhere, Kensington will now look at retained profits for some self-employed applicants, which is handy. Newcastle BS, meanwhile, has a five-year fix to 80 per cent LTV at 2.74 per cent and a 10-year fix at 3.29 per cent, with penalties within the first five years only.
Following the buy-to-let trend, Precise has launched rates for limited companies and HMOs. Rates include a two-year tracker at 4.09 per cent and a five-year fix at 4.69 per cent with fees of 1.5 per cent. It has also changed its age limits and will now go up to age 110.
Mansfield BS has a specialist buy-to-let mortgage for light refurbishment to 70 per cent LTV at 4.49 per cent discounted for three years, while Coventry is offering an 80 per cent LTV buy-to-let mortgage. This is a five-year fix priced at 4.79 per cent with a £1,999 fee.
Right, I am off to submit my self-cert application…