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 It's not always apparent what impact the European Commission has on our banking sector - but it certainly is this week.
The commission has demanded a break up of both the Royal Bank of Scotland and the Lloyds Group - RBS is to sell off 318 branches, while Lloyds will dispose of more than 600 branches over the next four years.
Northern Rock was also told by the commission last week that it must not appear in the top three of the mortgage best buy tables until the end of 2011. These requirements don't come into force until next year, however since the 'relaunch' of Northern Rock mortgages, they really have been very competitive in the market (see best buys below) so it really will be a case of snapping up these deals whilst they are still available.
One way round it, of course, is that most best buy mortgage tables don't include broker exclusive deals. Mind you, as discerning and intelligent readers that you already knew that and more importantly you knew that there's no substitute for tailored, specialist advice from your resident broker!
Darling (no, not you, I'm talking about our Chancellor) has said that the break up could result in three new high street banks over the next three to four years. For example, Lloyds is understood to be looking to sell off TSB Scotland, Cheltenham & Gloucester and Intelligent Finance. Importantly, the banks assets will only be sold to new entrants in the mortgage market to help boost competition.
Darling tells us, half a dozen big providers was not acceptable. For once, we agree.
TIP OF THE WEEK 1: Beware non-refundable booking fees.
A worrying trend within the mortgage market has been for lenders to start to charge non-refundable booking fees, even if the mortgage application has been rejected. The justification for these fees is to cover the cost of processing mortgage applications, but this argument seems fairly hollow when lenders like HSBC are charging an eye watering £999 non-refundable fee. Ouch! You better make sure that sale doesn't fall though.
As ever, speak to your Resident Broker and we will take this into account when advising. We have strong views on this.
As always, call one of our advisors today for more information 01424 205 373
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