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Swap rate hikes the real problem, not base rate: Whittaker

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The noise around the Bank of England base rate rise is drowning out the bigger problem of recent swap rate changes, according to Mortgages for Business.

Mortgages for Business chief executive David Whittaker said the increase in BBR was simply “putting right what they did last year” and suggested that “we shouldn’t be getting this wrong”.

Speaking at yesterday’s Financial Services Expo Midlands event, Whittaker said swap rate rises were the real problem.

He said: “The moves on five-year swap rates worry me greatly – I think it is 1.09 per cent today but in September it was 0.77 per cent.

“Come February next year I can’t believe any lenders will be running sub-4 per cent five-year fixed rates by then. I tell people that the fix-rate ship is sailing from the harbour and that they need to get on it because it’s not coming back anytime soon.”

Whittaker said that a new buy-to-let lender was due to launch into the market next month.

But he also suggested any future new lenders would lose credibility if they didn’t come to market with both a personal and limited company product proposition.

Whittaker said the recently-introduced PRA underwriting changes for portfolio landlords had landed but “a whole lot of lenders have had to change their DNA, skills and computer systems” in order to comply.

He said: “There will be a car crash at some point when all this comes together.”

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