Advisers felt the most significant development in the mortgage market for brokers during June was the launch of PostOffice4Intermediaries.
Funded by Bank of Ireland, Brian Murphy, head of lending at national mortgage advisory firm Mortgage Advice Bureau, said “this is a welcome addition to the market providing further competition and choice to mortgage borrowers”.
He stated initial indications were that PostOffice4Intermediaries deals have proved very popular with brokers during their first month.
Deals included rates from 1.98 per cent for a two-year fixed and from 3.15 per cent for a five-year fixed through advisers.
For those looking to remortgage, the Post Office will offer a two-year fixed rate at 2.58 per cent or a five-year fixed rate at 3.38 per cent, both of which come without product arrangement or value fee and will have legal fees paid by the lender.
Help to Buy
Help to Buy continued to attract attention, with statistics released by the Department for Communities and Local Government revealing a total of 2,283 properties were bought with the support of the Help to Buy equity loan scheme in May.
According to the figures, the majority of sales were to first-time buyers, representing 86 per cent of total sales, and the average (mean) purchase price was £206,084.
Nationwide also announced its support for the Forces Help to Buy scheme, which helps members of the forces boost their deposit through an interest free loan.
David Hollingworth, associate director of London and Country Mortgages, says it was great to see support for the scheme building.
Initial indications were that PostOffice4Intermediaries deals have proved very popular with brokers during their first monthBase rate tracking
The success of Help to Buy has caused house price bubble concerns at the Bank of England of late.
Mark Carney, governor of the Bank of England, ended June by saying people should focus on a medium-term “new normal” of interest rates around 2.5 per cent, rather than worrying about when the bank makes its next slight rise above 0.5 per cent.
Pressed on when interest rate rises should be expected, in an interview on BBC Radio 4’s Today programme, Mr Carney said Britain would not be returning to the “old normal” of interest rates around 5 per cent, but the economic conditions could be right for the “new normal” of around 2.5 per cent in the first quarter of 2017.
Talk about when the base rate may start to increase could lead some to review whether they should switch, Mr Hollingworth said, adding that increases in fixed deals are already feeding through as was seen when FTAdviser again asked mortgage advisers to cast their eyes over the latest deals available and give their verdicts.
Top deals in June
For 90 per cent plus loan-to-value mortgages, Dale Jannels, managing director of Atom, says Saffron for Intermediaries offers a “currently market leading” 5-year fixed rate of 4.87 per cent for first time buyers. In addition, he said the lender offers a manual assessment of all applications and no credit scoring.
For this part of the market, Mr Hollingworth joined Mr Murphy by pointing to the Post Office launching in the broker market “with a bang” with well priced fixed deals across the LTV board.
He said some of the 90 per cent LTV options will sit well with first time buyers helping with set up costs, for example a three-year fixed rate deal is offered at 4.45 per cent with no fee.
On buy-to-let, advisers noted competition heating up.
Two noticeable buy-to-let mortgages were launched this month, according to Mr Jannels, with Accord buy-to-let removing its 2.5 per cent arrangement fees and replacing some products with fees arranging from £800 to £2,495.
Secondly, he said Natwest Intermediary is offering a 2.75 per cent tracker for two years with a £1,995 fee and free valuation up to 75 per cent LTV.
But Mr Hollingworth pointed to BM Solutions two-year fixed rates as low as 2.19 per cent at 60 per cent LTV with a 2.5 per cent fee if using BM Conveyancing as the best buy-to-let deal of June.
But our advisers failed to agree on what was the overall best residential home loan offered last month.
The best residential mortgage deal of the month was “something a bit different from Virgin Money”, according to Mr Hollingworth.
He noted that Virgin Money offered a 4-year fixed rate at 2.99 per cent with a £1,094 fee to 60 per cent LTV.
Mr Hollingworth said: “There isn’t a huge range of 4-year deals but with 5-year fixes on the increase it can offer a good rate while still providing security in the medium term.”
However Atom’s Mr Jannels said the best residential mortgage was launched right at the end of last month.
For flexibility, Mr Jannels said the Coventry Building Society’s Flex for term deal at 2.69 per cent for loans up to 80 per cent LTV, was the deal that caught his eye.
He pointed to free valuations and legals on remortgages plus no early redemption penalties at any time and £999 in lender fees as to why this deal stood out.
