Are lenders trying to cut down on buy-to-let business or simply attempting to stay ahead of expected regulatory changes?
After a lot of talk around when a base rate rise would be inflicted on the UK, all eyes moved across the pond to see whether the Federal Reserve would give an indication of an increase there any time soon. September is still favourite but much will depend on employment figures over the coming weeks. December is also a possibility, which could mean the UK not moving until January.
However, the UK economy grew by 0.7 per cent in the second quarter, following a 0.4 per cent increase in Q1. This puts more pressure on the MPC to at least start the engine in preparation for rate rises in the near future.
Elsewhere, figures from the Land Registry show annual house prices have increased by 5.4 per cent to June. This means the average property value in England and Wales stands at £181,619, which is higher than the previous peak in November 2007.
However, the imbalance between property supply and demand is reaching critical levels and we are still to see a joined-up Government policy on the matter.
In the markets this week, three-month Libor is stuck in the mud at 0.58 per cent while swap rates have dipped a little further after their rises a couple of weeks ago.
2-year money is down 0.03 at 1.15%
3-year money is down 0.02 at 1.39%
5-year money is down 0.02 at 1.74%
10-year money is down 0.13 at 2.13%
Product-wise, rate increases seem to be spreading, due either to market conditions or because lenders are simply too busy to cope. Virgin Money, Santander, Barclays and Post Office have all increased or pulled rates.
Elsewhere, Halifax has introduced a valuation fee refund for first-time buyers and home-movers on selected products, and Hinckley & Rugby has a two-year fixed 90 per cent LTV product with no penalties available from 2.95 per cent.
In the buy-to-let world, there have been a couple of key changes. First, Barclays has moved to an affordability-based model. This means loans will no longer be assessed on rental income alone.
Meanwhile, Accord has, disappointingly, raised its rental calculation from 125 per cent at 5 per cent to 125 per cent at 5.24 per cent. Obviously, this will make things more difficult for a lot of people. But are lenders trying to cut down on buy-to-let business or simply attempting to stay ahead of expected regulatory changes?
Elsewhere, TSB has introduced two-year buy-to-let fixes to 75 per cent LTV from 3.14 per cent with a £995 fee and a two-year tracker to 60 per cent LTV at 2.04 per cent with a £1,995 fee. Also, BM Solutions has two new deals for loans over £300,000 from 2.19 per cent with a £1,995 fee.
Finally, I have not spoken about Martin Wheatley’s exit from the FCA. Hopefully the new leader will have another look at the outrageous increase in adviser fees.