With Theresa May racing to the middle ground, will her chancellor rethink George Osborne’s buy-to-let changes?
Has anyone else noticed a sea change in the press coverage of Brexit in recent days? Far from the doom and gloom of Project Fear, there seems to be a plethora of better news stories ranging from ‘Actually, it’s not as bad as we thought, though it could still get bad’ to ‘Brexit could just be the best thing since sliced bread’.
Given that Europe itself looks more like a basket case than ever, big organisations and their staff do not really want to leave London, there has been a coup attempt in Turkey and other sad events have happened elsewhere, the UK still looks like a pretty safe bet.
The best thing the Tories could have done was to hold a quick leadership contest, clear out the old guard, put Brexiters in key positions so they couldn’t throw stones and start again with a blank canvas. Which, of course, they have done.
Our new prime minister was also wise to make her first foreign meeting one with Angela Merkel, and the pictures of them warmly together, the ‘no hurry’ message and the conciliatory tone were also welcome. Let’s hope the honeymoon period lasts.
This was especially important because the Tories’ so-called Opposition continues to implode in the most public, embarrassing way.
I do not mind admitting that I have never voted Blue, but let me say this: so what if Labour membership has increased? Power will never be attained in order to make changes under the current ‘leadership’, which seems unable even to form a credible opposition.
It is a crying shame and a split seems inevitable.
May has wasted no time in racing to the middle ground and it will be interesting to see what our new chancellor does. Will there be, for example, a rethink over buy-to-let changes, which were very much George Osborne’s baby?
As things seem to be stabilising, a couple of MPC members have voiced the fact that they think it may be too early to make a base rate cut, even in August. I tend to agree. We need to let things play out a bit longer before we use up a potentially important tool.
In the markets, three-month Libor stands at 0.52 per cent while swap rates have remained calm.
- 2-year money is up 0.03% at 0.54%
- 3-year money is up 0.01% at 0.56%
- 5-year money is up 0.01% at 0.64%
- 10-year money is up 0.04% at 0.92%
So, while our market continues to dust itself down and cautiously continue with business as usual, what changes have there been this week? Nationwide has kept up its age-related changes and extended to 80 the maximum age at application for retired mortgage customers, with the maximum age of repayment extended to 85. There are some tight criteria but this is a welcome start.
In fact, Nationwide generally seems to have been very helpful of late, with some great bonus criteria and a good affordability calculator. It also listens if you have an issue.
It has, however, followed some other lenders by increasing two-year tracker rates by up to 0.15 per cent.
Furness Building Society has launched products aimed at loans between £300,000 and £500,000, starting from 1.4 per cent discounted for two years with a £1,499 fee.
National Counties has a new residential mortgage for UK expats working abroad. It is also available to anyone in the UK who is paid in a foreign currency.
Market Harborough has an expat product on a buy-to-let basis that is available on a five-year fix at 3.6 per cent with rent calculated at 125 per cent of pay rate. The fee is 0.75 per cent.
Coventry BS will no longer offer step-up applications to new customers from 28 July, while Halifax has stopped sending your clients an acceptance or decline letter for interest-only repayment vehicles.
TSB has improved its buy-to-let rates and Skipton has new intermediary-exclusive products with the removal of the £995 completion fees. Accord has cut rates on no fewer than 20 products across the 75 per cent to 95 per cent LTV tiers.
Finally, gross mortgage lending reached £20.7bn in June, up 3 per cent on last year and up 16 per cent on May.
While the CML prediction from the start of 2016 may look lumpy now, given events, we may not actually be far short of it by the end of the year, maybe mid-way between last year’s figure and this year’s target. September and October will be key months.
Andrew Montlake is director at Coreco Group