Movement from BTL lenders more muted this week 22.10.2010

Author: Mike Freeman Posted on: 22 October 2010

Home news this week has been dominated by the announcement of the Governments Comprehensive Spending Review and the resultant impact it will have on the economy.

Whilst the level of the cuts were widely predicted, give or take a few billion, the uncertainty was where the axe would actually fall and who would be losers. I’m sure there will be a few winners, most likely to be consultants drafted in on daft hourly rates of pay to state the obvious. Some should remember “common sense required, apply within”.

Setting aside political or economical views, the harsh realities of the announcement are being digested and conclusions drawn on the effects it will have on both the individual and country as a whole. Only time will tell on the actual outcome, but it does mean strength is needed from the economy as a whole to speed our recovery.

Comparisons have also been made against previous spending reviews and whilst the fallout will be painful for many, history tells us that this round is not as sweeping as previous reviews, notably in 1976, and we have lived to tell the tale.

This week has also seen the release of the minutes for the Bank of England meeting for October. One member is still pushing for rate rises and Quantitative Easing (QE) is still under debate. November’s figures for inflation and growth forecasts are likely to be the drivers for any changes in QE

During the past week 3 month LIBOR has remained unchanged 0.74%.

As at the 20th October, the rates for each £ Swap, as reported by ICAP plc was :-

Swap Rate Change on the Week

1 Year Swap 0.81% +0.01%

2 Year Swap 1.20% -0.02%

3 Year Swap 1.43% -0.05%

5 Year Swap 1.99% -0.03%

7 Year Swap 2.53% +0.04%

10 Year Swap 3.11% +0.12%

On the subject of products, movement from the buy to let providers has been more muted this week.

Coventry has again revised a few products, with Platform and Manchester Building Society making more significant changes to their product ranges.

Platform’s products are certainly more attractive, having reduced rates and introducing a standard flat fee across their range.

Manchester Building Society has introduced a number of new products, but their appetite still appears limited, given the requirement for a personal income typically of £40,000 and restrictions on raising funds for remortgages.

At this stage, there are no further predicted rate changes.

Comments