Aurelia Butler

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Three large UK lenders announced they would cut the costs of home loans this week as mortgage rates continued to fall on the back of an improved outlook for inflation.The moves by NatWest, Halifax and Virgin Money followed cuts by Nationwide, Barclays, TSB and HSBC last week, offering further relief to homeowners who are still facing higher borrowing costs than in the wake of last year’s “mini” Budget.“More banks and building societies have been lowering their rates in recent weeks as they try to attract more borrowers,” said Aaron Strutt, director at Trinity Financial. “We are starting to see acceptance criteria changes to make it easier to get mortgages and even the return of lower rates being offered for a week to tempt borrowers to take action.”On Tuesday, Virgin cut costs on some products offered via brokers by as much as 0.41 per cent, while Halifax reduced the rate on its five-year fixed-rate remortgage product by 0.18 percentage points and decreased its 10-year one by 0.27 percentage points. NatWest told brokers it would cut the rates on both purchase and remortgages by up to 0.30 percentage points across both two and five-year products from Wednesday.Some smaller lenders also pushed through cuts to rates on Tuesday, including Foundation Home Loans and Vida Home Loans. Accord, Yorkshire Building Society’s intermediary-only subsidiary, is also reducing the cost of some of its buy-to-let mortgages. Persistently high inflation for most of this year has led to a sharp rise in mortgage rates in recent months. But a bigger-than-expected drop in official inflation data for June helped to stabilise financial markets, with lenders moving to reduce funding costs.Official data released on Monday also showed that UK mortgage approvals rose in June, with consumer credit growing at its fastest pace for five years despite analysts predicting that the mortgage market would soften in the face of high rates.Dan Frumkin, chief executive at high street challenger Metro Bank, said that despite macroeconomic and inflationary pressures, the mortgage market was expected to remain robust.

“I think it’s more buoyant and resilient than some people think — we anticipate lower origination volumes, but we don’t anticipate it being as bleak as others think it will be.”Frumkin said that although the Bank of England was expected to raise base rates again on Thursday, the move should not affect mortgage costs, as they rely on swap rates, which are based on the market’s expectation for inflation.Nevertheless, mortgage costs remain significantly above the highs in the wake of last September’s disastrous “mini” Budget that triggered chaos in the markets. The average price of a two-year fixed mortgage is 6.85 per cent, according to Moneyfacts, almost 20 basis points above last October’s peak. More

ISTANBUL (Reuters) – Turkey’s banking watchdog has stopped allowing credit card payments by instalment for foreign travel, such as flights, travel agency fees and accommodation, in a step seen dealing a blow to foreign travel operators.The move, which hit airline shares and was seen as curbing foreign currency outflows, was one of two measures announced by the BDDK watchdog late on Monday, which it said were among coordinated steps to strengthen financial stability.Tourism operators say they have been hit in recent years by a cost-of-living crisis and weakness in the lira, which has lost half its value against the dollar since end-2021, with travellers commonly using credit cards to finance trips.”Almost all of my clients were paying by instalments,” said Cem Polatoglu, spokesman of a tour operators’ platform, noting an average trip for two cost around 50,000 lira ($1,850). “The number of people who can pay this amount in one go is very few.””The logic (of the step) is ‘citizens shouldn’t go abroad and spend foreign currency’,” he said, adding that the foreign travel sector was also being hit by increasing difficulties faced by Turks in securing tourist visas.Polatoglu forecast a sharp fall in the numbers going abroad after a surge in spending by Turkish citizens abroad in the first half of the year to $3.17 billion – an 84% increase from the same period in 2022 – with such spending facilitated by credit card outlays.The credit card move also had an impact on airline share prices, with Turkish Airlines dipping 1.3% and the airline Pegasus dropping 2.3%. Istanbul’s main BIST-100 index was 0.4% lower.The BDDK also said in a statement late on Monday that it had decided to increase the risk weightings taken into account in calculating capital adequacy standard ratios for consumer loans, personal credit cards and vehicle loans.Turkish authorities have recently taken steps aimed at reining in chronic high inflation and reducing domestic demand, with the central bank hiking interest rates by 900 basis points in two months alongside other tightening measures.($1 = 26.9618 liras) More