A number of lenders have increased rates over the last few days with one in particular only giving us one hours notice to save the existing rates for potential new customers. Normally a lender will send round a notification advising of the impending rate increases and the timing for withdrawal of the current product offerings. We will then need to submit a full application and pay any fees to secure the existing rates. Most lenders will give twenty four hours notice, some a couple of days. But one high street lender only allowed one hour to secure their rates. This meant that they did not see a ‘spike’ in business as people rallied to submit cases as this left no time to secure the lower rates. In the main, these rates increased by 0.2%, but an increase is an increase. And if a customer was not able to be contacted and engage within that hour, then the rate was lost!
Product of the week comes from Virgin Money who have launched some superb four year fixed 2.99% rates (4.4% APR) for a limited time. For remortgages these also have free valuation and legal costs. The lender fee is also low at just £999 and customers can overpay up to 10% per annum penalty free. Max loan to value is 60% and the rate increases to 3.29% at 75% borrowing.
The Nationwide House Price Index suggests that house prices increased in May 2014 by 0.7% and are 11.1% higher than in May 2013. The report also advises that the average house price now stands at £186,512.
Finally, Natwest has decided to follow the LLoyds Banking Group in capping income multiples for all loans over £500k. Recently the lenders would have looked at a customer’s affordability rather than an income multiple. However, with immediate effect, the maximum any customer will be able to borrow with these lenders is 4 x their income for all loans over £500k. Both have highlighted London as their main reason for changing their criteria. Specifically that wages are not keeping pace with house price growth and forced inflationary pressures have forced these required changes…