Month in Mortgages: Is Help to Buy helping people buy?

NatWest’s adviser sales unit revealed it will offer the same mortgages that have been offered direct since late last year: a 4.99 per cent two-year fixed rate and a 5.49 per cent five-year fixed rate available at 95 per cent loan-to-value (LTV) with no product fee.

Santander will also offer a 4.99 per cent two-year fixed rate and a 5.49 per cent five-year fixed rate, as well as a 4.99 per cent variable rate tracker deal, all with no booking fees on properties up to the value of £600,000.

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Launched on 3 January, Lloyds rates, available up to a maximum loan to value of 95 per cent, include a two-year fixed rate of 5.19 per cent - increasing to 5.39 per cent if you’re not already a Lloyds banking customer - with a £995 fee.

Many advisers have confessed to being underwhelmed by the rates available. Jane King, adviser for Ash Ridge Private Finance, London, said the scheme is “only worth considering if you really only have that 5 per cent deposit”.

She added: “The rates between the mortgages on offer outside of Help to Buy that require a 10 per cent deposit or more can be between 1-2 per cent lower than those available on Help to Buy mortgages and still not every applicant is getting a mortgage with Help to Buy.

“I am not convinced the rates offered for the privilege is worth it unless the applicant really has nowhere else to go. It seems like a premium for desperation.”

Data protection breaches

Away from Help to Buy, last week FTAdviser sister publication Financial Adviser revealed that some leading estate agents are holding prospective homeowners hostage by demanding proof of deposits held and account details in a potential breach of the Data Protection Act.

Interestingly, FTAdviser commentators did not seem surprised by this with IFA John Bloomfield writing: “This is nothing new it has gone on as long as I have been in the industry”.

Another anonymous commentator wrote: “This has been going on since time immemorial and I guess is rearing it’s head again as volumes of property sales increase.”

Financial Adviser has now launched a campaign for tighter regulations for estate agents and better consumer protection. It will be interesting to see how regulation could be improved as The Estate Agents Act 1979 is supposed to regulate estate agent’s work to ensure that they act in the best interests of their clients.

Clearly this is failing somewhere along the line.

Plummeting mortgage rates

Also last week, Mortgage Brain data revealed that mortgage rates have tumbled by 32 per cent in the last 12 months, with latest figures showing that the rate for a 60 per cent loan-to-value, two-year tracker has dropped from 2.49 per cent to 1.69 per cent.