So the silly season seems to have crept up on us and all of a sudden another year has almost flown by. It’s been a funny old year really, tough for most, with a lot of anger and frustration directed at our “leaders”. The Iraq War enquiry is in full swing, strike news abounds, war has been declared on everyone from MP’s and bankers to company directors, (see BA and Consignia for further details), and especially dear old Simon Cowell.
Acouple of things have caught my eye this week in terms of mortgage lending institutions. First of all we have the British Banking Association, (BBA), defending the large gaps between LIBOR rates and the product pricing we are seeing, and we also have a Which report on what 2000 of their members say are the best and worst mortgage lenders.
As far as 3 month LIBOR is concerned this was always the reason that lenders used for not lending during the height of the credit crunch when it was artificially high. Now, according to Moneyfacts, “Three-month Libor is at 0.55 per cent, while the average two-year tracker rate is 3.76 per cent. Two-year swaps, which lenders use to fund fixed-rate mortgages, are at 1.84 per cent, compared with the average two-year fixed-rate deal at 5.13 per cent”.
So yet again our dear Chancellor is set to meet with the major lenders and give them a smacked bottom and ten minutes on the naughty step for not lending enough to consumers and businesses. Where they are lending, they are getting shouted at for charging much too much.
The Chancellor is looking really mean and determined this time, and I reckon Ali D will be giving it to them both barrels like a streetwise, no nonsense gangster rapper.
Figures from the Council of Mortgage Lenders, (CML) today show that gross mortgage lending in June was an estimated £12.3 billion, a 17% increase from £10.5 billion in April and a 48% decline from £24.8 billion in June 2008. The last two quarters have held steady, albeit at low levels.
Whilst there has been some tentative positive news emerging from the housing market in recent days, these latest figures reflect more of a seasonal jump than a long-term improvement. There is still no doubt that lenders are not lending enough to meet consumer demand and where lending is taking place, this is often at seemingly expensive levels. A sustained increase in lenders willingness to lend is vital to help provide the boost to the economy that is sorely needed.
After deciding to watch the last few minutes of the tennis which turned into an enthralling hour or so and a hot sleepless night punctuated by a restless little boy crying, I dragged myself out of bed before 6 am to the hallowed halls of the BBC to do a live TV interview on house prices.
Although the usual nerves kicked in, I enjoyed it even if being interviewed standing up was new! Actually, standing up was a good way of doing it and Simon Jack is a very good interviewer who keeps things flowing and certainly knows his stuff.
Andrew Montlake, Communications Director at Coreco and ‘Mortgage Personality of the Year 2008’, gives his views — honest and no holds barred — on the latest developments within the mortgage and property markets.
