The average London property price, now half a million, skews the UK market, and RBS bankers set up desks on Facebook
The average property price in London has hit £500,000, according to the Land Registry. FT research suggests that with a required deposit equal to six months’ wages, Londoners’ dreams of becoming homeowners are getting further and further away.
This frustration is rippling out across the country as constrained supply and high demand continues.
Meanwhile, sales in the £1m-plus market have slumped due to the increase in stamp duty, with LonRes suggesting sales between £1m and £2m fell 22.5 per cent between July and September. But there has been a new wave of “million pound towns”, such as Cobham, where the average home is over £1m.
It seems the UK market is more distorted than it has been for a while, making a national housing policy even more tricky. This is also the reason why using a blunt instrument, such as loan-to-income caps, will not solve all the issues.
In the markets this week, three-month Libor is unchanged at 0.58 per cent, while swap rates have sprung up.
2-year money is up 0.08% at 1.0%
3-year money is up 0.09% at 1.19%
5-year money is up 0.10 at 1.51%
10-year money is up 0.09 at 1.93%
Nationwide is making product rate reductions, with big cuts between 80 and 90 per cent LTV. It now has a two-year fixed at 2.34 per cent to 80 per cent LTV, a 2.64 per cent two-year fix at 90 per cent LTV and a 90 per cent LTV tracker at 2.89 per cent.
Precise has further improved choice, with a range of four-year fixed products starting at 3.79 per cent with a low reversion rate.
Santander’s large loan products on mortgages up to £3m are now available with a two-year fix at 1.79 per cent and a five-year fix at 2.84 per cent, both with a £1,995 arrangement fee. It has also expanded its buy-to-let products, with two-year fixes from 2.29 per cent and five-year fixes from 3.29 per cent with £1,995 fees.
Accord’s new buy-to-let products include a 1.89 per cent two-year tracker at 60 per cent LTV, with a £2,495 fee and incentives.
Virgin Money has some new buy-to-let intermediary exclusives, with a two-year fixed from 1.84 per cent and five years from 2.99 per cent with £2,495 fees. For a 10-day period it has also increased cashbacks to £750.
Finally, it was interesting to note RBS bankers will be using Facebook to communicate with each other, swap information and potentially offer banking services to the public. This is through the new Facebook at Work concept, which involves a desktop and mobile app working with high security features. Whether it is through initiatives such as this, the development of Blockchain technology or putting a whole bank on a phone app, change is coming fast.
You have been warned.
Andrew Montlake is director at Coreco