Intermediaries Matter - December
13 December 2011
Welcome to the December Edition of Intermediaries Matter. This month includes:
- Great, NEW feature The Market View - Financial market summary from a member of our Treasury covering the last month.
- Product News from Thomas Girling, Mortgage Product Manager - discussing the impact of this month's market on our pricing.
- Skipton Spotlight On... Remortgaging, featuring our top tips on the best remortgaging opportunities for you and your client
- 12 Changes of Skipton 2011! - A festive look back over the year at Skipton Intermediaries.
NEW FEATURE - The Market View - Comments from Skipton's treasury department
During November, the outlook for the UK economy has worsened as the European sovereign crisis stepped up a gear. After the failings in Greece, the focus turned to the heavily indebted Italy and Spain as the borrowing costs of both rose to worrying levels. Towards the end of the month, Germany, the last "pillar" in the Euro, was in the spotlight as investors began pulling out of even German government debt. Worrying signs for the future of the Euro, with major implications for the UK's export potential. In the short term, the effect is that the UK's borrowing costs have fallen significantly as it benefits from being one of the few remaining "safe havens" for investors.
Data released during November suggests a slowdown in economic activity and a sharp fall in inflation in the coming months for the UK; both of which suggest that further monetary easing from the Bank of England is very possible, which would lead to even lower long term interest rates. The yield curve in the UK has flattened significantly in the past months, meaning longer rates have come down as demand has increased whilst shorter rates have risen as liquidity is squeezed, driving Libor up. The 2-year indicative swap rate was at 1.25% on 25 November, and the 10-year rate was at 2.28% - this is as low as the spread has been since late 2008. The latest Public Borrowing figures show the government is broadly on track with its deficit reduction plans, which are easing some of the pressure currently faced by other European sovereigns.
Product News
Mortgage lending remains strong at Skipton so the past month has seen only minor changes to our range, with some rates starting to edge up on the back of recent increases to swap rates, although we still have made reductions on our 3 year fixed rates. We have also refreshed our Buy to Let range, which remains competitive and continues to sell well in a challenging market.
As 2011 draws to a close, our focus is turning towards next year and what we will need to deliver in order to achieve our targets for 2012. We expect it to be another challenging year but you can rest assured that Skipton will continue to want to lend and as such we will still be offering competitive products across our range throughout the year.
Skipton Spotlight On... Remortgaging
As things on the purchase front start to slow, as is the norm at this time of year, this could be a good time to talk about remortgage possibilities with your clients.
Remember, Skipton’s remortgage package includes Free Standard Valuation and Legal Fees to a maximum of £610, property value up to £500k
Big maturities coming up
According to CML data there are £8 billion of mortgage maturities occurring in the industry in Q1 2012. Abbey, RBS, LBG, Northern Rock and Nationwide had the largest market share over the past five years, so these lenders could represent the biggest opportunity.
January will be an ideal time to review clients from late 2005/early 2006 who took out a 5 Year Fixed Rate. For February, look at clients who took out a 3 Year Fixed Rate in late 2008/ early 2009.
Don’t forget that 90% of homeowners are currently trying to reduce their monthly outgoings including fuel, utilities, food and mortgages, so they will be eager to know how they can save money.
In addition to this, we didn’t want to bypass the opportunity to remind you that - The stamp duty exemption for First Time Buyers up to £250,000 ENDS on 24 March 2012 - remind your first time buyer clients now!
The 12 Days of Skipton Intermediaries Christmas!
A lot of great things have happened at Skipton throughout 2011 to make lending easier for Intermediaries, and we thought we would take this opportunity to celebrate these 'gifts' to you with a look back over the year
- 95% LTV mortgage products launched through selected intermediaries.
- Reintroduction of a competitive fixed and tracker Buy To Let product range up to 70% LTV.
- New affordability calculator, so brokers can see how much their clients will be able to borrow.
- New online DIP process, allowing brokers to get decisions quicker than ever before.
- Improvement of our maximum loan amounts, now allowing up to £300k for 95% LTV lending and £500k for 90% LTV.
- Offers now valid for up to six months.
- New low fee product options, with only a £195 booking fee to pay.
- We launched our lowest ever 2 year fixed rate at only 2.48% (please note that this product is no longer available).
- Ability for customers to split products and only pay one product fee.
- Electronic upload facility for supporting documentation, saving brokers time in processing.
- Launch of the Options mortgage - 5 year tracker where customers have the option to switch to a fixed rate at any time during the tracker period without paying an ERC.
- The launch of fixed rates for terms of up to 10 years.
These are just some of the key changes that have been made this year and we hope that you have been able to benefit from some of these features. From Skipton, we wish you all a Merry Christmas and a very prosperous 2012.
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