RBS launches new 90% purchase product:
The thaw in the markets continues with the introduction of a 90% purchase product from RBS. The product, unlike others in the recent past, is not limited to first time buyers and small properties, as it is available to a maximum borrowing of 500k.
Hugh Wade-Jones Partner at Enness Capital was keen to impress that although the rate at 4.79% as a tracker is not for the faint-hearted it is definitely a positive step. He goes on to say that, ‘As has been the case prior to this, with one lender putting their head above the parapet it will only serve to encourage others to follow and thus drive down rates and terms further for the consumer
Quite how much of this is government coercion is unknown. They have already ‘put the screws’ on their 100% owned subsidiary, Northern Rock, as they were falling short of their imposed target of £5bn lending this year. The advent of the fourth quarter saw The Rock drop their rates significantly in an effort to reach that target. Although they may fall slightly short it was interesting to see how far they would go (dropping rates by as much as 0.7% in some cases) to meet their quota and from that we can only assume that the penalties are severe if they miss by too much.
The RBS news combined with the new target for The Rock of £9bn in new lending next year, is good news for all of us and is certainly Government policy finally coming to fruition. It certainly will offer more competition to the other major players in the market and with the 3rd highest City bonus pool on record in the offing, next year could be a much brighter year for the UK property market.
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