Monthly Archives: December 2012

Mis-selling by bank staff still widespread, survey claims

More than four out of ten frontline bank staff believe that they are being forced to sell potentially inappropriate products to customers, according to a survey that takes an unprecedented look behind the scenes at bank culture. Damning evidence from Which?, the consumer group, undermines claims that banks are changing their sales culture in the light of scandals involving mis-sold products such as payment protection insurance.

Which? commissioned ComRes, a polling company, to talk anonymously to 371 branch and call centre staff who deal with sales issues. They found that 45 per cent said that they were expected to sell “regardless of whether the products is appropriate or not”.

Coventry Building Society will no longer offer interest-only residential mortgages for new lending.

From 3 December, Coventry Building Society will only offer interest-only mortgages for buy-to-let loans.

Existing borrowers at Coventry Building Society on interest-only will not be able to increase their borrowing on an interest-only basis but they will be able to port their existing mortgage.

The FSA established as part of the final publication of the Mortgage Market Review that ultimate responsibility for repaying the capital at the end of an interest-only term rested with the borrower, not the lender.

The FSA will publish a thematic review on the issues facing existing interest-only borrowers in early 2013.

Nationwide revealed it was pulling out of interest-only in October this year – it also took the line that interest-only has become a niche product, representing less than 3 per cent of the applications that it received.

If you have an interest only mortgage and would like a review to ensure that you have suitable repayment vehicles in place and they are on target or you would like to discuss transferring it to a Capital & Interest basis. Contact us on 01489 580020 or email us at  info@parkgate.net

 

Bank of England refrains from further QE stimulus

No more quantitative easing (QE) stimulus programme, which has injected £375bn into the UK financial system.

Under QE, the Bank creates money and uses it to buy government bonds to try to stimulate the economy.

The Bank’s Monetary Policy Committee (MPC) also decided to keep interest rates at 0.5%, the record low they have been held at since March 2009.

The UK came out of recession recently, growing 1% between July and September.

The strong rebound, which was helped by tourist spending during the Summer Olympics, followed nine months of modest economic contraction.

However, recent data suggests the economy remains finely balanced between growth and recession. Retail sales were revealed last month to have fallen a faster-than-expected 0.8% in October.