There are many reasons why I love working in Broadgate right in the heart of the city, apart from being on the doorstep of the major banks and many of our clients. One of them is undoubtedly the arena in the middle which stages various events, such as yesterday lunchtime watching the Lions game on a big screen with my colleague, and general rugby legend, Rob Henderson, who played in these games not so long ago.
Rob Henderson
All the talk at the moment in our industry is round the fact that most lenders are increasing their fixed rates, some dramatically, in a way that suggests we may well have seen the last of the incredibly competitive fixed rates for a long while.
This is something that many commentators as well as myself have been warning against for some time, but I think it is the scale of the changes that has surprised even those of us who expected it. Some lenders are increasing their fixes by around as much as 0.9%, which is a massive blow for many who are coming off low tracker rate products.
You can rely on football fans to eloquently say what everyone else is thinking, and as far as the tube strike is concerned last night was no exception. To most of us working hard and struggling on in the face of redundancies, cuts and pay freezes all over the place, this latest action is a smack in the face for all who live in London.
I know I am meant to write about mortgages and property, but looking round at people gamely walking, cycling and finding any means necessary to get into work shows London’s’ resilience, bombs did not stop us so tube strike pah, and why I love it so much.
As widely predicted, the Monetary Policy Committee has again voted to hold the Bank of England Base Rate at 0.5% today.
There has been growing talk that there are now definite signs of recovery, especially with the news this week of a growth in the service sector for the first time in a year, according to The Chartered Institute of Purchasing and Supply’s (CIPS) services survey.
Taken together with the Halifax reporting that house prices rose by 2.6% in May, the Bank of England stating that there was an 8% rise in the number of mortgages approved for house purchases, as well as the Nationwide Index of consumer confidence jumping further, there do seem to be some reasons to be cheerful.
It may have escaped some peoples notice, but 3 month LIBOR, (the rate at which banks lend to each other that was so out of kilter during the main thrust of the credit crunch), is now back to around 0.7% above Bank Base. This is the upper limit of “normality” we have seen in the past.
In this respect then, the credit crunch seems to be at an end. However, if we are back to some kind of normality why are lenders still finding excuses not to lend as much? Surely also rates should be lower now and lenders margins seem to be bigger than ever so they must be “coining it in”?
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.A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £495.
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