This year we must ensure the wider public really gets to grips with what brokers do and why we are valued
Welcome to the bright and shiny New Year. Like the opening day of the football season, the first couple of weeks bring a fresh dose of optimism that we must all hang on to, no matter what. It is set to be an interesting year, with the usual twists and turns along the way.
As most ‘experts’ have been spectacularly off target for a long time, I will avoid the usual early predictions many make. You know the ones: house-price growth will continue, albeit at just 2 per cent overall. The top end of the market will carry on struggling due to stamp duty, with transactions at a low level.
Yes, there will be more government housing schemes, white papers and so on, but the number of homes actually being built will still be woefully short.
These schemes seem a bit woolly. Take the Starter Homes one, for example, with homes available from 2018 at a 20 per cent discount to first-time buyers. Will the discount be passed on when they sell? Will the homes be built in the right areas? Is a home at £450,000 actually affordable for a keyworker in London? Have the builders actually committed to building them?
I will also not mention that Bank base rate will stay unchanged all year, despite rising inflation. Or that gross mortgage lending will be much the same, at around £245bn, with a continued increase in remortgage activity offsetting potential falls in the buy-to-let market, albeit the latter may not be as pronounced as some think.
Of course, the ‘will they, won’t they?’ Article 50 debate will reach fever pitch at the end of the first quarter. It probably will go ahead, although the lack of any well-thought-out plan will dog the issue for a while yet. Europe itself will continue to be a major talking point with some important elections on the horizon.
Meanwhile, the US will have a Trump-led growth spurt that may prove difficult to sustain. As for any other predictions about the US with Trump in power: no chance. Anything could happen.
So 2017 will no doubt have its fair share of challenges – but I wouldn’t be foolish enough to prognosticate. Regardless, we will be there as ever, servicing our clients. We just have to make sure this is the year the wider public really gets to grips with what brokers do and why we are valued.
In the markets, three-month Libor is still at 0.38 per cent while swap rates have reduced a bit (unlike my waistline over the holiday period).
2-year money is down 0.03% at 0.62%
3-year money is down 0.03% at 0.71%
5-year money is own 0.03% at 0.91%
10-year money is down 0.03% at 1.31%
To the product world and, despite the fact we have said goodbye to the Help to Buy guarantee scheme, a number of lenders are still offering 95 per cent loan-to-value products, which is good. Halifax has 95 per cent rates from 3.34 per cent on a two-year fixed with a £999 fee, or 3.74 per cent with no fee for first-time buyers, while Virgin
Money is also keeping its 95 per cent LTV offerings available. Halifax too has removed its £295 mortgage account fee from all products, but has increased two- and five-year fixes a touch.
Scottish Widows has some new remortgage deals, with low rates from 1.29 per cent up to 60 per cent LTV for professionals with a £1,499 fee. The flexible range starts at 1.39 per cent and five-year fixes from 2.24 per cent.
Meanwhile, Accord has given a boost to its offset products by offering £1,000 cashback, as well as new products including a two-year rate at 1.64 per cent to 65 per cent LTV with a £995 fee.
We are also seeing the new BTL rules on rental calculations. Lenders’ new methods of calculation will mean the first step is now a personal affordability calculator rather than a simple mathematical one. Precise will take a personal approach, which will not penalise lower-rate taxpayers, while NatWest has an affordability calculator and a calculation of 145 per cent at 5.5 per cent.
Peer-to-peer lender Landbay has a new BTL range for professional landlords, with rates from 3.88 per cent and rental calculations at 125 per cent at 5.5 per cent.
Andrew Montlake is director at Coreco