News Review
Inflation and GDP confuse as borrowers fix By Sarah Davidson
a spate of confusing market statistics caused uncertainty about the future of mortgage rates last month. as the office of national
Statistics published inflation for January at 4%, up from 3.7% in december, gross domestic product showed the economy shrank 0.6% in the final quarter of 2010, mainly due to bad weather. Bank of england governor,
mervyn King, said inflation would likely fall back reducing the need for an imminent base
rate rise that might harm the economy. But the minutes of February’s monetary Policy committee meeting revealed that three of the nine members voted to hike base rate to curb inflation fears. meanwhile
national
broker countrywide said remortgaging applications reached a two year high in January as speculation surrounding base rate rises continued. the firm also claimed fixed
rate products made up 84% of all mortgage applications in
Trade bodies call for MMR consolidation By Sarah Davidson
industry trade bodies united in their responses to the Financial Services authority’s mortgage market review consultation paper on distribution and disclosure last month, calling for a consolidation of all proposed regulation. the intermediary mortgage
Lenders association said the fragmented mmr proposals risked confusion and uncertainty about responsibility in the mortgage advice process and called for more clarity on affordability and appropriateness. meanwhile, the association
of mortgage intermediaries called for a newly written single consultation paper to consolidate the mmr and include european regulatory proposals due to be published by the end of march. the council of mortgage
Lenders said the FSa should rethink the mmr as many of its proposals are “disproportionate” and will
fail to deliver a sustainable mortgage market. ami director, robert
Sinclair, said: “ami remains concerned about the fragmented approach to consulting on these major changes. due to the interconnection of the proposals there is a pressing need for further consultation on the combined elements of the mmr in a single paper, prior to implementation. this further consultation should also consider the significant impact of impending europe initiatives on the current proposals.” Peter Williams, imLa
executive director, said: “We are in agreement with many of the proposals set out in cP10/28 but to avoid confusion and uncertainty there is scope for discussion to ensure clarity about what precisely is expected from the relevant parties. We need to see and discuss a fully integrated set of policy and rules.
4 mortgage introducer MARCH 2011
January, a 9% increase on the previous month which saw fixed rate products reach their highest level since august 2009. grenville turner, chief
executive of countrywide, said: “the growing popularity of fixed rate mortgage products is a telling sign that many are prepared to pay slightly more to give themselves peace of mind and stable outgoings.” national broker mortgage
advice Bureau corroborated, saying 75% of its new mortgage clients chose to fix in January, a rise from 45% of borrowers in
the same period last year. Brian murphy, head of
lending at mortgage advice Bureau, said: “With a variety of fairly negative economic news, rising inflation and an increase in unemployment levels, borrowers who are active in the market are erring on the side of caution and increasingly opting to fix their repayments.” in the third week of
February nationwide and the mortgage Works raised most of their fixed rates by 0.3%, while Halifax cut fixed rates by up to 0.7%.
LBG alone in payout on variable rate cap By Sarah Davidson
Lloyds Banking group was alone in its agreement with the Financial Services authority to refund borrowers “confused” by rising mortgage rates after they were wrongly led to believe they had a cap on their Standard Variable rate. While LBg agreed to
refund £500m to around 300,000 customers who ended up paying more than expected for their mortgage after a promised 2% over base rate cap was removed in october 2008, both nationwide and Skipton said they wouldn’t be refunding customers despite removing their own SVr caps. in January last year
Skipton removed the ceiling on its SVr, which promised borrowers their revert rate would not go over 3% above Bank of england base rate. a spokeswoman for Skipton said: “What has happened with Lloyds is a matter for them and the regulator but
our position remains the same. the ceiling on our SVr and our right to remove it in exceptional circumstances was clearly outlined in customers’ terms and conditions.” nationwide also said
the LBg payout had no bearing for its borrowers. a spokesman said: “our situation is completely different from Lloyds’. We kept our promise to have a 2% above base rate cap for borrowers taking out a mortgage before the 30th april 2009. “the higher SVr of 3.99%
only applies to mortgages taken after that date [including product transfers]. there has been no customer confusion at nationwide and we are not in discussions with the FSa about this.” the LBg payout followed
around 50 complaints about confusion over eligibility for the SVr capped rate caused by their mortgage offer letters.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56