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%
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.
Andrew Montlake is director of Coreco Group