Unless you’ve managed to avoid being mowed down recently by a boy racer, driving a twin-shaft Escort MKII adorned with twin St. George’s flags, you will have realised that the World Cup is just around the corner. The Summer normally means hiring fans for the office, but this time around, I can see this being extended to include at least one 50-inch HD Ready Plasma screen per company.
The World Cup may mean fewer self-certification applications as the unemployed (sorry Mr Financial Services Authority (FSA), I mean the barely employed) use their dole money to set-up camp as close to the action as possible without buying a ticket. But the rest of us will undoubtedly become just as absorbed in the whole tournament as we adopt the new Mars slogan and start to ‘believe’. So, will businesses grind to a halt?
Before we wade into the stats, it’s important to remember the back-drop. Although we’ve tried to forget the quarter-finals when we exited the competition on June 21 after coming-off second best to Brazil 2-1. Furthermore, the televised viewing times of the matches in Japan and Korea were more disruptive for us than the matches in Germany will be. Don’t forget that July is also in the Summer holidays so a decline in applications is normally anticipated.
Platform, which was completely non-conforming and broker-dependent at that time, experienced the sharpest drop in June’s figures. But interestingly, like the other intermediary-based lenders, they saw July’s figures make a come-back, so perhaps applications were held-back in the brokers’ offices while the footy was on.
Notably Nationwide shows differing results from its two main business channels. What is poignant is the intermediary market’s ‘bounce-back-ability’ (to coin footy-speak) in July – in other words the influence of ‘business partners’ compared to the aloof and often fickle distribution the high-street attempts to court.
By drilling deeper, the boomerang reaction could be explained by the ease at which intermediaries can switch to the remortgage market – an attempt to focus on recouping the disposable family silver of customers following extravagant spending on fast-food and alcohol (more accustomed to Christmas than June). Or perhaps cunningly tapping into the ‘feel-good’ factor (while it lasted) to tempt customers to commit beyond their usual boundaries. However, these assumptions are not supported by the Council of Mortgage Lender’s (CML) remortgage stats whose May-August 2002 figures remained static at a third of all transactions.
Maybe it was quite simply a prolonged period of inactivity that impacts you the broker first as many of you are self-employed, with the effect of going out of the competition, sending a clear sobering wake-up call to get back-on-track after a few weeks with minds transfixed ‘on the ball’ rather than being ‘on the ball’ yourself. And without your stimulation in the marketplace the lenders are ineffective – a fact that may be more exasperating this time around as 20 per cent more mortgage business is now written by brokers.
Instead of being all doom and gloom about the slight business blip, let’s just enjoy the euphoria, which will (God-willing) take us to the final on July 9. Use the World Cup wisely to entice new customers with marketing campaigns and try to be patient with those who are oblivious to it all and keep enquiring whether you have received their P60 or not.
Mainstream
Portman is churning out good rates at the moment, e.g. its 4.19 per cent, 2.31 per cent discount for two years to 95 per cent LTV. Don’t forget The Mortgage Works will be the broker channel for mainstream business later in the year, which probably will be more facility than rate-based, so enjoy access to Portman while you can.
The Royal Bank of Scotland’s 4.49 per cent fixed to 30 June 2008 is also good. As predicted in this column, the defined markets for RBS Intermediary Partners four brands are beginning to be muddled, with First Active breaking ranks to encroach on buy-to-lets.
Self-cert
BM has launched a 4.95 per cent two-year fixed with 1.5 per cent completion fee, The Mortgage Business (TMB) a 5.09 per cent with £599 – both to 85 per cent LTV.
Rooftop has introduced a 0.25 per cent loading on its flagship 90 per cent stepped discount for the first time.
Buy-to-let
Mortgage Express, which has aligned its rental calculation with the market at 125 per cent (120 per cent on five-year fixed or longer), now always calculates on payrate. Watch for its two-year products coming soon.
Amusingly, Clydesdale made a bold statement, saying ‘our fixed rates have not gone’, only to send an e-mail the next day to say they actually have.
Mortgage Trust has removed the need to prove earned income for limited company buy-to-lets up to £1m.
Adverse
Kensington has dropped the two-year fixed rate from its Simple Choices range but it remains on the Extra Choices range, which should help packagers.
igroup has made a big splash about the potential earnings on selling its retention products.
