Market Watch: Retention proc fee snub will not last forever


Brexit continues to generate uncertainty in the market, but some good news is emanating from the mortgage lenders

After managing to cram 25 Prince songs into last week’s article, I will not be embarking on anything that tricky or time consuming again for a while as I am too nervous about the Brexit vote.

At the moment it seems everyone is blaming the Brexit vote for a whole host of issues, such as the fact construction output fell by 0.9 per cent in the first quarter of the year.

Someone who especially loves this excuse is Chancellor Osborne who seems to have found a new gloomy persona in recent weeks.

I have read a couple of articles over the past few days that state that the housing market now has a distinctly “uncomfortable” feel about it.

According to the latest figures from the Land Registry all regions apart from London and the East fell in March, some by around 2 per cent.

While March is usually an unspectacular month for prices, more than a few commentators are starting to get the feeling that this could be the trend for the future across the country as a whole.

London continues to climb, albeit slightly, as gains in the low to mid end offset falls at the top end, but the “trickle-down” effect could well start to appear.

They also reported a fall in the number of completed house sales at a time when many expected to see a rise owing to those panicking about the stamp duty deadline.

All of this is of course compounded by the uncertainty and threat of Brexit.

Meanwhile, the great retention procuration fee debate rumbles on with several major lenders seemingly ruling out any plans to do this in the near future.

It will not last forever.

Coventry seems to be the latest lender, along with Yorkshire and Skipton, considering supporting hard-working brokers further, which is good news.

In the markets this week three-month Libor is at 0.59 per cent, while swap rates are sitting on the fence waiting for the Brexit vote.

  • 2-year money is up 0.05% at 0.87%
  • 3-year money is up 0.08% at 0.96%
  • 5-year money is up 0.11% at 1.13%
  • 10-year money is  up 0.12% at 1.56%
MarketWatch graph

Product-wise the biggest news is that Halifax has finally made a change to its much-maligned age policy, which is welcome.

Scottish Widows has followed suit and will now lend to a maximum working age of 70.

There have been some good changes where age is concerned with building societies leading the way and there are now 22 building societies that will lend into your 80s. Ten of these have no upper age limits at all.

I still believe age policies are wrong and lending decisions should be made on an affordability judgement rather than just on age.

Santander has a new intermediary exclusive which is a five-year fixed rate to 75 per cent LTV at 2.49 per cent with a £1,495 fee. They also have an excellent 60 per cent LTV 5 year fix at 2.24 per cent with a £995 fee.

Virgin Money has made some improvements and reduced its two-year fixed fee saver option to 2.38 per cent at 75 per cent LTV and launched a new HTB Equity Loan two-year fix to 75 per cent LTV priced at 1.84 per cent.

It also launched its Marathon Exclusive fixed-rate priced at 2.62 per cent (the distance of the London marathon for those slow like me), available to 90 per cent LTV with a £262 cashback.

Platform has changed the maximum loan amounts on its LTV bandings and will now lend 60 per cent LTV up to £1.5m and 90 per cent LTV up to £500,000. It has also reduced rates across the board by up to 0.15 per cent.

Metro Bank continues to tweak criteria and will now assess affordability of self-employed applications by using the average of the last two years’ profits supported by the accounts.

Accord has a new two-year remortgage deal at 65 per cent LTV with no fees, a free valuation and £250 cashback with a payrate of 1.99 per cent.

Finally, it is interesting to hear that the supermarket battleground will resume in the mortgage market as Sainsbury’s plans to relaunch soon to club it out with Tesco.