View more on these topics

Market Watch: Has the post-Brexit tide really turned?

Andrew-Montlake-700.jpg

Now that everyone realises house prices are not going to crash, there are more happy faces about; cautious, but happy

Whisper it quietly but it seems to be a good-news week. Has the tide really turned or is everyone so fed up with negative Brexit talk that they are going too far the other way?

There is a lot more positive activity around, feeding in to some positive data – and about time too. Now that everyone realises that house prices are not going to crash and the mortgage world will go on, there are many more happy faces about; cautious, but happy.

The UK Manufacturing PMI rose to 53.3 from 48.3 and shows a solid rebound in reaching a 10-month high in August. According to reports, companies received more new work, from both the UK and exports, helped of course by the sterling exchange rate. Employment also increased.

Meanwhile, the UK construction sector moved closer to stabilisation with PMI rising to 49.2 from 45.9 and “signs of a rebound in client confidence from the lows seen earlier this summer.”

This should please the new Chancellor ahead of the all-important Autumn Statement.

In our market, the next few weeks will be crucial to gauge how busy the rest of the year will be, and I suspect remortgage business will play a significant part. Those lenders still refusing to engage in discussions with brokers over retention should be thinking again.

Meanwhile, around half of all mortgage lenders are still not passing on the latest rate cut, according to Moneyfacts. Carney should get out his proverbial whip.

In the markets, three-month Libor is ensconced at 0.39 per cent while swap rates have ticked up, stayed the same or dribbled down, depending on your fancy.

  • 2-year money is up 0.02% at 0.45%
  • 3-year money is up 0.03% at 0.46%
  • 5-year money is unchanged at 0.50%
  • 10-year money is down 0.02% at 0.71%
Market graf

In the mortgage world it is hotting up as we enter the important last quarter of the year. Santander is back in the thick of things by reducing rates by up to 0.25 per cent on selected fixed rates and adding a £250 cashback to selected purchase deals. Its 60 per cent LTV two-year fix is at 1.35 per cent and its five-year fix is at 2.09 per cent, both with a £995 fee.

Virgin Money has made some significant reductions and is the latest to introduce a five-year fix at 1.99 per cent to 65 per cent LTV. Its buy-to-let rates have also seen some drops, with a two-year fix to 75 per cent LTV available from 2.19 per cent with a £1,995 fee and £500 cashback.

NatWest has been busy reducing a swathe of products, including its Help to Buy scheme at 95 per cent LTV to 3.81 per cent and its five-year fixed rate at 60 per cent LTV to 2.07 per cent. Meanwhile, Halifax has changed its LTV bandings on all product transfer and further advance products.

The Nottingham has increased income multiples to 4.5 times for those borrowing up to 90 per cent LTV, while Hinckley & Rugby will allow joint-borrower and sole-proprietor mortgages for both residential and buy-to-let, which more lenders should consider.

Investec has made some excellent reductions, by up to 0.6 per cent on its products, and has a three-year fix from 2.14 per cent and a five-year fix from 2.39 per cent as well as a lifetime tracker from 2.34 per cent.

Clydesdale Bank has reduced a selection of fixed rates with two-year fixes at 60 per cent LTV available from 1.49 per cent, and its 95 per cent LTV first-time buyer rate is at 3.69 per cent. Its discount products will not benefit from the 0.25 per cent Bank rate reduction, however, as the discount has been reduced by 0.25 per cent to keep the pay rates the same.

Kent Reliance at last reduced its SVR by 0.25 per cent from 1 September, as did Skipton, while National Counties has made lots of interesting rate reductions.

Kent Reliance has changed its valuation policy for loans over 50 per cent LTV on properties worth more than £2m, with a long-form valuation required. The valuation validity is cut from six months to four months. In today’s environment, you can understand why lenders want to take more care when valuing more expensive properties, which can be subject to more sudden price swings.

It was good to hear that Accord is planning to look at first-time landlords and consumer buy-to-let customers from next year, as well as allowing new-build properties.

I also love its new idea to give clients a nice ‘Welcome’ hamper of useful goodies on completion.

He Rows

Andrew Montlake is director of Coreco Group

Recommended

Fixed-Income-Portfolio-Coins-Pounds-Growth-700x450.jpg

Newcastle Intermediaries launches five-year fixes

Newcastle Intermediaries is launching two five-year fixed rate mortgages starting from 2.70 per cent at 85 per cent LTV. That product, for remortgage customers, has no reservation or completion fees. The lender has also launched a five-year fixed at 3.30 per cent at 90 per cent aimed at first-time buyers. It also has no reservation […]

Bank-of-England-Panorama-BoE-700x450.jpg
1

Fewer than half of lenders pass on rate cut to SVR borrowers

Fewer than half of lenders have failed to pass on the cut in the Bank of England base rate to borrowers on Standard Variable Rates, new figures show. Analysis by Moneyfacts.co.uk, the price comparison website, found that a number of lenders also hiked the price of variable rates on offer to new borrowers in anticipation […]

Home-House-Monopoly-Money-Property-700x450.jpg
3

Brokers shut out by Help to Buy crackdown

Brokers have expressed frustration at a clampdown by the Homes and Communities Agency which effectively cuts them out of the loop when advising clients on the Help to Buy Equity Loan scheme. The HCA says that, as a result of fraud and data protection risks, brokers should not be informed of the ongoing progress of […]

Creating opportunity out of change

By Denise Wond, marketing manager The buy-to-let market has recently been the subject of a raft of tax changes, all of which make it a less profitable and less appealing proposition for investors. In response, we’ve seen a dip in demand for BTL mortgages and that’s bad news for many advisers who will now be looking […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • John 5th September 2016 at 3:05 pm

    Market Watch: Has the post-Brexit tide really turned?

    Please , can we at least get the terminology right? Post Brexit?

    Brexit has not happened yet, it hasn’t even begun . What we are looking at is the initial market response to the referendum result and some hedge betting on the outcome .

    There is a lot of water to pass under the bridge yet and only when the act of cessation is completed and the true trading /economic outcomes are known , will the Post Brexit position be clear. In the meantime we will see more speculation, periods of confidence and panic , and opportunities to do a bit of ‘navel gazing’ in magazine articles.