Nationwide increases trackers; Virgin raises fixed rates – round-up

Nationwide increases trackers; Virgin raises fixed rates – round-up

Nationwide has increased its two-year tracker rates by 0.25 per cent following the Bank of England’s decision to raise the base rate from one per cent to 1.25 per cent earlier this month.

Existing products must be reserved by 8pm, Tuesday 21 June 2022.

The product for a new member moving home at 85 per cent loan to value (LTV) with £999 fee is now 2.54 per cent while a no-fee product is 2.89 per cent.

A two-year tracker remortgage at 80 per cent LTV with a £999 fee is 2.59 per cent, while the no-fee product is 2.99 per cent.

 

Virgin Money

Virgin Money has increased the rates on all fixed rate products by 0.40 per cent.  

A two-year fixed purchase and remortgage at 85 per cent LTV is 2.85 per cent while the fee saver option is 3.29 per cent.

On a five-year fixed purchase and remortgage product at 80 per cent LTV, the rate is now 3.44 per cent with a £995 fee.

 

 

Natwest increases rates; Virgin Money withdraws exclusive deals – round-up

Natwest increases rates; Virgin Money withdraws exclusive deals – round-up

Natwest has increased rates on its two and five-year fixed-rate residential and buy to let (BTL) products.

Changes include a 0.18 per cent increase to its two-year fix purchase product with a £995 fee at 60 per cent loan to value (LTV), where the rate has risen from 2.64 per cent to 2.82 per cent.

At 85 per cent LTV, the two-year fixed purchase deal with no fee will increase from 3.01 per cent to 3.19 per cent, and at 90 per cent LTV the equivalent will rise by 0.2 per cent to 3.24 per cent.

Changes to Natwest’s five-year fixed rate purchase products include the 60 per cent LTV with no fee which increases by 0.19 per cent to 3.16 per cent, and on 90 per cent LTV, also with no product fee, a rise from 3.09 per cent to 3.25 per cent. 

BTL products where rates have increased include Natwest’s two-year fixed rate purchase 60 per cent LTV deal with a £995 fee, which was 2.69 per cent and is now 2.87 per cent. The two-year fix at 75 per cent LTV with a £1,495 fee has increased by 0.19 per cent to 2.63 per cent. 

On its five-year fixed BTL purchase product at 75 per cent LTV, with a fee of £1,495, the rate has increased by 0.19 per cent to 2.78 per cent.

Rate changes on its green mortgages include two-year fixed purchase product at 85 per cent LTV, which increases by 0.2 per cent to 2.85 per cent. This has a product fee of £995.

The two-year fixed green remortgage at 75 per cent LTV with a £995 fee has seen the rate has increase by 0.27 per cent to 2.74 per cent.

 

Virgin Money

Virgin Money said all exclusive fixed rates will be withdrawn at 8pm on 15 June.

The lender has also increased all fixed term fee-saver products by 0.20 per cent, with the exception of its 65 per cent LTV two, three and five-year fixed fee-saver deals which will increase by 0.10 per cent.

Major UK banks can fail safely due to ‘robust resolution regime’ – BoE

Major UK banks can fail safely due to ‘robust resolution regime’ – BoE

According to an assessment by the Bank of England (BoE), which is the first undertaken, if a bank were to require resolution customers would still be able to access their accounts and business services as normal.

Additionally, shareholders and investors rather than taxpayers would be the first to bear the bank’s losses and costs of recapitalisation.

The banks involved in the assessment were Barclays, HSBC, Lloyds Banking Group, Nationwide, Natwest, Santander UK, Standard Chartered and Virgin Money UK.

Resolution is a way to manage the failure of a bank, building society or other financial entity to minimise the impact on customers, the financial system, and public finances. The BoE is the UK’s resolution authority.

During the financial crisis the UK did not have a regime to resolve banks without the use of public money, which meant the options were to let banks fail or bail them out with taxpayers’ money.

The BoE said that a “robust resolution regime” was in place following extensive work by UK banks and there were more choices if banks encountered “serious problems”.

Actions taken across the sector include holding more loss absorbing capacity, improving ability to monitor liquidity needs and use liquid resources throughout resolution; ‘resolution-proofing’ contracts and critical service arrangements; changes to group structure; better ability to plan at speed for “further restructuring changes to return the firm to long term viability”; and improved communication planning with the public.

However, it said that resolution was a “spectrum” and that it would always “likely to be complex to execute” so maintaining an “credible and effect resolution regime” was a “continuous process”.

Dave Ramsden, deputy governor for markets and banking at the BoE, said: “The Resolvability Assessment Framework is a core part of the UK’s response to the global financial crisis, and demonstrates how the UK has overcome the problem of ‘too big to fail’.

“The UK authorities have developed a resolution regime that successfully reduces risks to depositors and the financial system and better protects the UK’s public funds. Safely resolving a large bank will always be a complex challenge so it’s important that both we and the major banks continue to prioritise work on this issue.”

In its assessment the BoE evaluated banks on three themes: adequate financial resources, continuity and restructuring, and coordination and communication.

Shortcomings were identified in three firms, which the BoE said, “may complicate unnecessarily the Bank’s ability to undertake a resolution”. The firms were HSBC, Lloyds Banking Group and Standard Chartered.

HSBC’s shortcomings were around the production of resolution specific liquidity analysis and its plans to execute the restructuring actions in scenarios with a multiple point of entry bail-in.

Lloyds Banking Group and Standard Chartered also had shortcomings around production of resolution specific liquidity analysis, whilst for Standard Chartered the BoE identified issues around “identification and evaluation of all available restructuring options in a wide range of resolution scenarios”.

This relates to a bank’s availability of liquidity to support itself through a resolution.

The BoE has also identified “areas for further enhancement” for six firms, which are specific areas where continued work is needed to “enhance or embed capabilities in order to further reduce execution risks associated with resolution”.

The six firms were Barclays, HSBC, Nationwide Building Society, Natwest, Standard Chartered and Virgin Money UK.

The BoE said that it would repeat its assessment in 2024 and then every two years after that.

Virgin Money ups variable rates

Virgin Money ups variable rates

This was a rise of 0.25 per cent compared to the previous base rate and the lender has made adjustments accordingly. 

Its residential standard variable rate (SVR) will rise from 4.99 per cent to 5.24 per cent. The loyalty rate, which is given to qualifying residential borrowers who have held a mortgage for seven years or more, will go up from 4.74 per cent to 4.99 per cent. 

The buy-to-let variable rate will rise from 5.19 per cent to 5.44 per cent. 

These changes will take effect for new borrowers from 7 June and existing borrowers from 1 July. 

Across the Clydesdale and Yorkshire Bank brand, the residential SVR has also gone up to 5.24 per cent. 

The residential offset variable rate will go up to 5.45 per cent, while buy-to-let revert rate, also known as the offset variable investment housing loan rate, will increase from 5.60 per cent to 5.85 per cent. 

These changes will apply to new borrowers from 7 June and to existing borrowers from their next payment date after the same date. 

Virgin Money ups most fixed rates in exclusive, core and product transfer ranges by 0.2 per cent

Virgin Money ups most fixed rates in exclusive, core and product transfer ranges by 0.2 per cent

The changes will come into effect from 8pm today.

There are products that will not receive the full 0.2 per cent increase. This includes two and three-year fixed product transfer fee-saver deals at 65 per cent loan to value (LTV), which will rise by 0.1 per cent.

Its five-year fixed rate product transfer product with £995 fee will go up by 0.06 per cent, and its five-year fixed rate fee-saver will increase by 0.12 per cent.

On the buy-to-let (BTL) product transfer side, its five-year fixed rate at 60 per cent LTV will rise by around 0.14 per cent.

Virgin Money said that its two and three-year fixed rate product transfer products at 65 per cent LTV with £995 fee will be unchanged.

The rates for its two, three and five-year fixed rate product transfer BTL product at 60 per cent LTV, both fee-free and with £995, will also stay the same.

It added that its five-year fixed rate product transfer BTL product at 60 per cent LTV with £1,995 fee would not be increased.

Virgin Money ups mortgage rates

Virgin Money ups mortgage rates

The largest rate hike has been made to its buy-to-let two-year fix at 60 per cent loan to value (LTV) with a £995 fee, which is now 2.54 per cent, up from 2.33 per cent. 

The five-year fixed alternative has risen by 0.17 per cent to 2.68 per cent. 

At the 75 per cent LTV tier, the two-year fixed product has increased by 0.06 per cent to 2.61 per cent, while the five-year fixed option has gone up by 0.10 per cent to 2.75 per cent. 

For residential borrowers, the broker exclusive product at 85 per cent LTV, fixed for two years with a £1,295 fee, has increased by 0.14 per cent to 2.53 per cent. 

At 75 per cent LTV, two- and five-year fixed residential mortgages have increased by as much as 0.15 per cent, while the £995 fee paying and fee-free two-year fixes at 90 per cent LTV have gone up by 0.10 and 0.09 per cent respectively. 

Virgin Money ups rates and withdraws products

Virgin Money ups rates and withdraws products

The changes come into effect from 8pm today.

In its core range select products between 65 and 80 per cent LTV will rise by around 0.11 per cent.

On the product transfer side, certain products at 80 per cent LTV will be increased by around 0.04 per cent.

This includes its two-year fixed rate with £995 fee, which will be priced at 2.44 per cent. Its fee-saver equivalent will go up by 0.01 per cent to 2.69 per cent.

Its five-year fixed rate fee-saver product at the same LTV will go up by 0.04 per cent to 2.77 per cent.

The lender said that select exclusive purchase products will be withdrawn. This includes its two-year fixed rate at 75 per cent LTV with £495 fee, which had a rate of 2.49 per cent.

Its five-year fixed rate at 80 per cent LTV at 2.42 per cent will also be removed, along with its 85 per cent LTV equivalent at 2.53 per cent. Both come with a £495 fee.

Virgin Money is withdrawing its five-year fixed rate exclusive remortgage product at 2.3 per cent. It is subject to a £1,295 fee.

Virgin launches high LTVs; TSB and Platform up rates ‒ round-up

Virgin launches high LTVs; TSB and Platform up rates ‒ round-up

The new products will be available from tomorrow.

They include purchase fixed rates between 75 and 90 per cent LTV, which come with a £495 fee and £500 cashback.

The lender has also brought out 85 per cent LTV remortgage fixed rates, which come with a £1,295 fee, free valuation and free legals.

There is also a five-year fixed rate BTL deal at 75 per cent LTV and select product rates would increase.

It added that from 8pm today all 80 per cent LTV fixed rates would be withdrawn

This includes certain products between 65 and 90 per cent LTV, which will go up by 0.23 per cent. Rates begin from 2.23 per cent.

Selected BTL fixed rates between 60 and 75 per cent LTV will rise by 0.15 per cent. Rates start from two per cent.

 

TSB ups select rates and withdraws products

TSB has increased certain rates by 0.25 per cent, upped its variable rates and withdrawn select products.

In its BTL range, select five-year fixed rate house purchase and remortgage rates have gone up by 0.25 per cent.

Its five-year fixed rate for purchase and remortgage starts from 2.84 per cent and go up to 3.54 per cent.

In its residential range, the lender has increased select five-year fixed rate first-time buyer and house purchase products between 75 and 90 per cent LTV by 0.1 per cent.

Rates between 75 and 80 per cent LTV start from 2.99 per cent and go up to 3.19 per cent at 85 and 90 per cent LTV.

Its five-year fixed rates for new-build first-time buyer and house purchase rates have gone up by 0.1 per cent.

Rates begins from 2.96 per cent at 80 and 85 per cent LTV, and at 85 to 90 per cent LTV the rate is 3.09 per cent.

The lender has also withdrawn its two-year fixed rate first-time buyer, purchase and remortgage products with £995 fee.

 

Platform ups SVR, reversionary rates and tracker products

Platform has increased its standard variable rate to 5.24 per cent and upped the reversionary rate for its buy-to-let products.

Its BTL reversionary rate up to 70 per cent loan to value (LTV) is 5.5 per cent and is six per cent up to 75 per cent LTV. This applies to new business and product switch ranges.

In its product switch range, its two-year tracker mainstream products have increased by 0.25 per cent.

Clydesdale takes ‘cautious approach’ to BTL business in financial update

Clydesdale takes ‘cautious approach’ to BTL business in financial update

 

The group attributed its mortgage performance to the prioritisation of its margins in an “increasingly competitive environment”.

Its net interest income rose from £677m to £782m which it said was down to the higher rate environment, supportive conditions in the deposit market and improved liability mix which offset the pressure on mortgage spreads.

The group reduced its credit impairment provisions because of the overall stability of its mortgage portfolio and improved factors such as rising house prices. The average weighted loan to value (LTV) of its loan book remains low at 54.4 per cent, down on the 55.3 per cent reported 30 September 2021.

It released £9m in expected credit losses (ECL), bringing this down from £33m to £24m. It also reduced its post model adjustments (PMA), which are reserves to address any shortcomings in its ECL. This was cut from £54m to £42m.

Clydesdale lowered its PMA for payment holidays, which was introduced in 2020, as it said borrowers had “successfully exited” arrangements. This now stands at £8m, down from £22m.

However, it considered it to be likely that a group of borrowers will suffer “increased stress” from the heightened cost of living, so a £3m temporary affordability stress PMA has been introduced in response.

Other PMAs totalling £2m have also been retained.

Clydesdale’s PMAs for its buy-to-let portfolio remained fairly stable, with a nominal increase from £28m to £29m. It said it was taking a “cautious approach” to this component of the portfolio.

A spokesperson said: “The group continued to monitor the level of ECL held on BTL mortgages in the year due to uncertainty of the extended impact on landlords and that of their tenants. A new PMA is now held to reflect an impact on debt affordability as a result of rising energy prices and other inflationary effects.” 

Overall, the group maintained PMAs to address ongoing economic uncertainty over anticipated defaults in the future.

 

Profits and future preparations

Clydesdale reported a statutory profit before tax figure of £313m, up from £70m last year. Its underlying profit before tax stood at £386m, up from £243m.

It said this was driven by improved income and lower impairments.

The group said the macroeconomic outlook had “become more uncertain” over the six months and said it was “carefully monitoring” the impacts of higher inflation on the cost of living and the conflict in Ukraine.

However, it said it was not yet seeing signs of “significant stress” in the book.

“We enter this period with prudent coverage, robust underwriting and a defensive portfolio,” it added.

David Duffy, chief executive, said: “We’ve made good progress against our strategy, while delivering a significant increase in profit. We have positive momentum in attracting new customers to Virgin Money through record credit card sales, good growth in personal current account openings and a strong uptake of our new digital fee-free business current account.

“We have upgraded our net interest margin guidance given strong growth in unsecured lending, combined with the rising interest rate environment. Looking ahead, while the macroeconomic outlook is uncertain and there are increased cost pressures on consumers, we remain prudently provisioned and are confident in the quality of our loan portfolio.”

Generation Home hires Virgin Money’s Peter Dockar as commercial director

Generation Home hires Virgin Money’s Peter Dockar as commercial director

Dockar will oversee the development of the lender’s commercial proposition and product evolution. His key responsibilities include expanding and building on broker relationships.

He is the firm’s first commercial director and will report to chief commercial officer Graham McClelland.

Dockar was head of customer value at Virgin Money for around three years. He served as head of lending at CYBG before it was merged with Virgin Money.

He also worked at HSBC for around 12 years in various senior roles including European head of retail underwriting and UK head of mortgages.

Dockar joins John Bridgman, who was head of mortgage credit at Virgin Money, and joined the lender as head of credit earlier this year.

Will Rice, chief executive and founder of Generation Home, said: “Pete has an outstanding track record of driving growth and success in his previous roles. His buyer-first ethos mirrors that of Generation Home, making him an incredibly exciting hire. We’re delighted to have him onboard.”

McClelland added: “Pete’s experience in the mortgage industry is a valuable asset for Generation Home. His drive and enthusiasm for our business make him an excellent new addition to the team.”

Dockar said: “Generation Home is a truly innovative lender with financial inclusion at its heart. My previous experience, and conviction that home-ownership should be accessible to all who aspire to it, make this an incredible fit.”

Generation Home was launched in 2019. It is a joint borrower, sole proprietor mortgage lender that helps first-time buyers, remortgagors and homebuyers enhance their borrowing ability as friends and family can boost their funds.

It recently launched 95 per cent loan to value products in March, and received £1bn in funding from Waterfall in January.

Its products are available through TMA Club, Legal & General, MAB and Simply Biz.