Bye bye Financial Services Authority (FSA)

In its place will be the Financial Conduct Authority and the Prudential Regulation Authority.

Help to Buy scheme

This scheme is made up of two parts.

The first allows buyers to put down a 5 per cent deposit on a new home, with the Government putting up 20 per cent in a shared equity scheme. This loan is interest-free for the first five years. After that it will attract a 1.75 per cent payment, which will rise annually by inflation plus 1 per cent. The loan will be repaid once the home is sold.

The second part is a mortgage guarantee the government will offer to lenders, on new or old homes, for families who are creditworthy but cannot afford a big deposit. If a borrower’s property is repossessed, the Government will bear a proportion of the losses, with the lender taking the rest.

Bank of Ireland pay customers to leave

A number of Bank of Ireland customers affected by the recent increase to tracker mortgages have been offered £1,000 to leave the bank.

The troubled lender attracted much criticism when it announced plans to increase the differential on residential and buy-to-let mortgages because of a need to hold more capital.

Around 13,500 customers have been affected by the changes with some customers now facing a doubling of their mortgage payments.

The Bank of Ireland has now confirmed that a number of customers affected by the rate rise have been offered £1,000 to leave the lender.

http://www.mortgagesolutions.co.uk

What fun.....

Bank of Ireland increasing tracker rate when BoE has not

Bank of Ireland and Bristol & West customers with tracker mortgages are having their rates increased - despite the fact that the Bank of England has not changed it's rates. The rate would now be 3.99% above the Bank rate!

They seem to be claiming that some small print lets them do this. Doesn't sound like they are treating the customers fairly to me.

Bank of Ireland is pulling out of the British mortgage market, except through its joint venture with the Post Office which it continues to lend through. So I guess the Post Office will come in for some stick also.

Bank of England Negative Interest Rates ?

A recent suggestion by deputy governor Paul Tucker that the Bank of England could consider paying a negative interest rate on deposits lodged with it by high street lenders could have implications for the mortgage market, if enacted. Although the Bank remains unlikely to adopt such a policy any time soon, we agree with commentators that it could put downward pressure on savings rates, and make conditions more challenging for those lenders that rely on retail deposits to fund mortgage activity.

Mr Tucker made his comments about negative interest rates when addressing MPs on the Treasury select committee last week. "I hope that we will think about the constraints of setting negative interest rates," he said. "This would be an extraordinary thing to do and it needs to be thought through carefully."

The deputy governor argued that charging banks and building societies interest on deposits they held at the Bank – in effect, imposing a negative interest rate – would incentivise them to reduce those deposits, and increase lending to small and medium-sized businesses.

http://www.cml.org.uk

Building Society market share up

Building societies increased their share of the mortgage market in 2012, after lending by societies and other mutual lenders increased by 30% last year.

FCA given power to instantly ban products

The new Financial Conduct Authority (FCA) will have the power to instantly ban unsuitable financial products without consultation. In a guidance document published yesterday, it was also revealed that the new authority, which will be replacing the Financial Services Authority (FSA) early next year, will be able to impose tougher penalties for financial misconduct, pursue criminal prosecutions and make supervisory judgements about a firm's business model and forward-looking strategy. "The FCA offers a huge opportunity for the regulator and firms to start afresh, and work in partnership to reset how we deal with conduct in financial services," said FSA managing director, Martin Wheatley. The guidance was welcomed by the Council of Mortgage Lenders, the Building Societies Association, the Investment Management Association and the Association of British Insurers. Consumer Focus warned, however, that "the test of the FCA will be whether it prevents toxic products such as PPI, mortgage endowments or split capital trusts in the future. Will it intervene early or will pressure from industry delay action? A model where customers are ripped off, and then awarded compensation years afterwards, is expensive and wasteful and serves consumers badly."