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Wriglesworth in misselling warning on two-year fixes

Housing economist John Wriglesworth has warned that brokers could face future misselling claims if they advise clients to take out two-year fixed-rate products in the current market climate.

Speaking at the Mortgage Business Expo 2007 in Manchester last week, the Wriglesworth Consultancy managing director said he believes there is a significant risk that interest rates could rise by as much as 2 per cent in the next two years, storing up problems for borrowers who take out a fix now.

He said: “If brokers sell clients two-year fixed rates now, they could find themselves moving on to a 8 or 9 per cent standard variable rate. This is misselling and I appeal to all brokers to stop this.”

He noted that borrowers could find themselves unable to remortgage, resulting in defaults, following what has happened in the US housing market. “If repossessions start to happen, the media will turn on brokers and place the blame on you,” he said.

John Charcol senior technical director Ray Boulger says: “I do not follow this logic. For this to happen, we would have to see property prices falling and lenders not offering retention rates. My view is that interest rates are close to a peak. Therefore, it is a good idea to take a two-year fix or a tracker rate.”


FSA wraps up split-cap probe

The FSA has ended its five-year investigation into split-capital investment trusts after reaching a deal with four individuals that restricts their roles in the industry for various periods.BC Asset Management chief executive David Bruce has agreed to resign and give up his controlled functions except investment management and not to perform any significant influence functions […]

Hips delayed until August 1

The Government has delayed the implementation of Home Information Packs until August 1. The decision was made following an interim order preventing Energy Performance Certificates from being included in Hips from June 1.

Back to the Future

One MM hack had blonde moment at The Future of Life Assurance conference last week when, after registering for what she thought was the correct meeting, she walked into a conference room surrounded by a sea of film cameras, press, photographers and delegates.Expecting to see Ned Cazalet speaking, she was surprised to find that the […]

IFA zeroes in on Widows with-profits

An IFA has sent a letter to Scottish Widows chief executive Archie Kane asking him to explain why the firm’s with-profits fund has had a zero bonus rate for the last four years despite being invested over 50 per cent in equities.Radical Financial Services director Derek Richings says he sent the letter to Kane after […]


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