These days, it seems everyone wants to predict the future: when interest rates will rise, what the Bank of England will do next and whether this event or that will change the course of the markets. Even the real economists do not know what is going to happen. And as for forward guidance – really?
As I read last week in an excellent blog by estate agent Ed Mead, these comments just lead to further confusion for the consumer and conspire against the proper running of the housing market.
The biggest fly in the ointment now is the extraordinary move by China in devaluing its currency. This has ramifications across the globe as other economies get dragged further into damaging currency wars, as well as delaying rate rises in the US and UK.
Elsewhere, according to the RICS, the number of houses for sale is at its lowest since records began in 1978. With average stock levels falling 20 per cent since the start of the year and demand from buyers rising at its fastest pace since February 2014, you know what this means for house prices.
In the markets, three-month Libor is still at 0.59 per cent while swap rates have dipped slightly.
2-year money is down 0.05 at 1.1%
3-year money is down 0.06 at 1.33%
5-year money is down 0.08 at 1.66%
10-year money is down 0.06 at 2.04%
As for products, it has been another week of ups and downs. Clydesdale Bank is almost back at full capacity with its rates and criteria. The maximum loan on its buy-to-let products is back up to £1m at 70 per cent LTV or £750,000 at 75 per cent LTV. Its maximum LTV on residential £1m-plus products is 75 per cent to £1.5m.
Virgin Money has increased rates on its two-year fix intermediary exclusives and core five-year fixes, while TSB has new products up to 90 per cent LTV. Following suit, Nationwide has increased swathes of products by 0.1 per cent while its five-year fixes are up by 0.15 per cent.
In buy-to-let, the latest entrant, Newcastle BS, brings a range including a 2.49 per cent two-year discount at 75 per cent LTV. There is also a five-year fixed rate priced at 3.89 per cent, which comes with a £999 fee and a maximum LTV of 75 per cent. All have a free valuation.
Finally, good work by Marsden Building Society, which is tackling the ageism problem in the market by launching discounted-rate products aimed at homeowners with pension income. The products are priced at 2.99 per cent to 40 per cent LTV on an interest-only basis or 2.79 per cent to 60 per cent LTV for a repayment loan. Fees are £598 with free valuation and legals on remortgages. The minimum age is 55 and maximum at end of term is 85.
With news L&G is looking at a hybrid product between standard and lifetime mortgages and Leeds is reportedly looking at an age-related scheme too, this sector should have some much-needed options soon.