New products and lower rates – Confidence returning?

New products and lower rates – Confidence returning?

Numerous mortgage rate changes have occurred during the last week or so. Some up, no surprise there then, and some down. Many innovations remain in the mortgage market with lenders offering switch and fix type products enabling you to initially take a low cost Bank Base Rate tracker and, at any time during the term of the mortgage, switch to a fixed rate at no extra cost. Great products, although beware that the switch to a fixed rate will be based on the rate at the time. If tracker rates are on the increase, you can almost certainly guarantee that the fixed rates will also have risen.

One lender has recently re-launched their Buy to Let offerings for properties owned in Limited Company Names and also Houses of Multiple Occupancy (HMOs), including student lets, etc. With Buy to Let rates starting from 4.34% (tracker) and up to 70% loan to value, this is really positive news and signs that confidence in the market is on the up and lenders appetites for volume business is returning.

Further good news as the Co-operative Bank has launched a securitisation deal worth £2.5bn. The residential mortgage-backed securities (RMBS) deal is due to close at the end of February. What does this mean? In short, it’s a volume of mortgages, bundled together and sold off to investors as a package. On this basis, it dilutes the downside of any one borrower defaulting. For the industry, it means that the Co-op, once this book is sold, should be able to lend a further £2.5bn in new lending. Others, including Lloyds and Nationwide, have recently completed similar transactions. If these type of deals can once again become more standard, it will be great news for the market and economy.

Microbiz, the HDC initiative for small businesses, takes place on 13th March at the Drill Hall in Denne Road. Please support this – AToM will be there!

Finally, the WSCT Business Awards are just around the corner and if you have not yet voted for your chosen company of the year, then please do (hint hint!).