Of far more interest were a couple of issues debated around the table. Perhaps the most relevant topic was the impact of the recent local authority elections and the overwhelming swing towards the Conservatives. There was a lot of reflection about what the combination of Labour leadership turmoil and the renewed threat of the Conservatives might mean for the mortgage market.We have seen swap rates increase over the last few weeks and the political uncertainty which we now face will, by historical precedent, add to the upward pressure on rates. Woolwich has recently said it will be some time before we see competitive fixed rates. The markets are thinking ahead of the public because the real threat of upward pressure on interest rates is hardening all the time. We are also seeing a number of external economic factors, not least of which is the forecast mid-term weakness of the dollar combined with the bad debt problems hitting the Chinese economy. It is likely that we will see sustained upward pressure on rates but with a flattening off of the longer-term yield curve as the long end remains held down, in the UK at least, by the overwhelming demand for gilts from our colleagues in the pension industry. I strongly believe that in times of increased economic volatility, fixed rates remain the optimum choice for borrowers. Perhaps of more interest was the impact on home information packs. The Tories have declared that they would abolish Hips so the real threat of a Tory Government in the medium-term future would mean that the uncertainty surrounding Hips will increase. Hips are a Blair initiative, so the longer that he remains as leader, the more likely that we will continue to run with the prospect of Hips. However, if the Conservatives threaten to abolish Hips and this has traction with the public, creating problems with their implementation, then it is likely that a new leader might well capitulate. For those investing a lot of money in pursuit of the Hips’ package, I would suggest that you hedge your bets by placing a bet on whether Blair leaves office before or after the Hips’ implementation date next July.
Hats off to Lansons Public Relations executive Jeena Nadarajan when asking a stroppy editor about his dietary requirements on behalf of a client and getting email complaints about wild mushroom in mushroom gratin. She replied: “If I was the cook, you would all get vegetable samosa, fish cutlet and a variety of chutneys, masala dosa […]
Abbey says intermediaries will benefit after it announced plans to open an additional 100 branches. A spokeswoman says brokers will see service improvements from the additional resources the bank will have.
‘We are specifically attracting people with experience in the industry’
BM Solutions is on course to achieve a record month of applications. BM says it received its highest number of applications ever submitted in a 24 hour period on May 9 at 145m. The lender says it is on target to record 1bn of applications this month.
By George Boyd-Bowman, Fund Manager at Neptune Many Western investors have long bemoaned the lack of a true dividend culture in Japan, claiming the corporate culture is not tilted in favour of shareholders. Yet today, in the Land of the Rising Sun, we see a fresh impetus to focus on shareholder returns, which is leading […]
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Another investment manager offering enterprise investment schemes has alerted clients of a 10 per cent drop in value for one of its portfolios following new Mifid rules. Mifid II, which came into force on 3 January, requires firms to notify clients when the overall value of their portfolio, relative to its value at the beginning of each reporting […]
The recent enquiry by the work and pensions select committee has reignited the debate about the future of collective defined contribution schemes. Whether these sort of schemes can be incorporated into the current UK pensions landscape is a moot point. Let’s consider some of the arguments for and against CDC. First of all, it is […]
Retirement interest-only mortgages are set to become more popular following the FCA removing hurdles to selling them. The regulator sees RIO mortgages as a possible aid to the waves of maturing interest-only loans with no repayment strategy. However, the FCA also wants RIO mortgages to be sold more widely, for example as an additional option […]