View more on these topics

Leeds criticised over 1.89% loan deal

Leeds Building Society has been slammed by IFAs for marketing a mortgage to first-time buyers that sees monthly payments jump by almost 350 per cent after two years.

Leeds says the 1.89 per cent headline rate is designed to help FTBs and young professionals get on the property ladder but it locks borrowers into its standard variable rate – currently 6.5 per cent – for four years after the fixed period. Redemption char- ges are levied in the first six years.

The society says salary increases will help borrowers plan for the reversion to SVR but IFAs claim the loan could encourage people to get into debt.

In this week’s Broker Review, London & Country mortgage specialist James Cotton says anyone who can only afford repayments at 1.89 per cent is not in a position to take out a mortgage, let alone cope with the rate hike in year three.

The Mortgage Practitioner sole trader Danny Lovey says: “It is outrageous and irresponsible. I would not touch it with a barge- pole. This is the sort of thing that gets people into bad debt.”

Money & Mortgages managing director Marc Harrison says: “Few people wake up after two years with thousands of pounds more in disposable income.”

Leeds head of marketing and PR Karen Wint says: “Intermediaries and branch staff would only recommend this product under current regulations after assessing the specific needs of each client. As part of this process, the product features would be transparent from the outset.”


Happy medium

Medium-sized companies put in a remarkable performance last year and the prospects remain good

BBB share deal aims to ease refinancing

Berkeley Berry Birch shareholders have voted in favour of the group devaluing its equity from its flotation price in a bid to attract investor interest for the ailing group. The group needs to reduce its 11m capital adequacy shortfall and hopes that this measure, along with its new management team and the understanding that private […]

Open season

The Treasury must act soon to open up competition in the pension market


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm