Following on from the Bank of England Governor’s recent comments on a Sunday TV programme, and in fact some time beforehand, the rumour mills are rife trying to guess when we will see a Bank of England base rate rise. The economy is so buoyant that it needs a little slowing down, apparently! I was recently in attendance at a seminar in which five notables gave their views on when the increase may occur and the general consensus was that it could be later this year and, if not, then most definitely in the first quarter 2015.
With this in mind, have you checked your rate and product recently? Now might be the time for a review. However, be wary that your local bank of building society, in some cases, are taking up to four weeks to see customers! Some are a number of days behind on underwriting. And the most bizarre scenario we had this week was from a surveyor. They were happy to visit the property to carry out the normal mortgage lender valuation. However, they were also required to carry out a homebuyers report, a more in-depth survey for the customers benefit and, to great concern, they could not conduct this at the same time and would have to return, possibly four weeks later. Frustrating for the customer who wanted to buy quickly. Generally the whole market is incredibly busy yet the current staffing levels just can’t cope.
Further impositions were seen this week as the Lloyds Banking Group slapped on a maximum income multiple for all loans over £500k. With immediate effect, the lender will only allow a maximum of four times income on all loans in this segment. Described as a “targeted policy change” to address inflationary pressures in the housing market, especially London, the change applies to mortgage lending through Halifax, Lloyds, Bank of Scotland and Scottish Widows Bank. Thankfully, there remain other opportunities in the marketplace and we are hopeful that other lenders don’t feel that they have to follow the Lloyds lead. Only time will tell.