News

This week Tesco Bank announced that it was leaving the mortgage market, a decision it made partly due to the intense competition within the mortgage sector. Soon after this announcement, Nationwide Building Society revealed that its profits have fallen year-on-year by 19%, which it suggests is partly due to fierce competition. While the news that Tesco Bank is pulling out of the sector means that there will be less choice for mortgage borrows and will reduce competition, this news does show that the mortgage market is highly competitive at the moment and there are some great rates available to borrowers.

More than one-third of small and medium-sized enterprises (SMEs) are having difficulties with cash flow due to late payments, research from BACS Payment Schemes Limited reveals.

According to the research, 43% of SMEs experienced late payments during 2018 and, of these, 78% of had to wait one month or more beyond their agreed terms before they were paid. This resulted in an estimated total of £13bn late payment money being owed to SMEs. Receiving payment beyond the agreed date is likely to affect the cash flow of SMEs as they are more likely to rely on these funds than larger organisations – there are ways to ease cash flow difficulties however.

Equity release can be a great way for older homeowners to give their retirement income a boost, allowing them to release cash tied up in their home without needing to downsize. But just what are these later life borrowers doing with all that extra money? Well, even though many use it to fund home improvements, holidays or simply to enjoy a comfortable standard of living, research from Key shows that many are also using their housing wealth to clear debts.

The expertise of the Moneyfacts team is regularly in demand from news outlets and journalists across the national and financial spectrum, with many relying on our up-to-the-minute data and insightful quotes to inform their stories. Here are just a few places we’ve been in the news this week.

• Our story on the average two-year tracker rate falling was picked up by a number of publications, including Mortgage Strategy, Mortgage Solutions, Financial Reporter, Your Mortgage and Which?. “It appears that an increasing number of products this month, and subsequent intensifying competition, has driven the average variable rate down,” said Darren Cook, one of our resident finance experts. “The amount of interest a borrower is required to pay monthly on a variable tracker rate mortgage could of course change over time, but any fluctuations in rate are likely to be linked to external factors such as the Bank of England Base Rate.”

• The Daily Mail, This is Money and The Times all covered our research on rising easy access rates, in which we revealed that competition from challenger brands is pushing rates further upwards as providers continually look to leapfrog one another to offer the best rate in the market. However, Darren warns that these rates may not be around for long: “The providers that are pushing up rates will be closely monitoring the level of overall deposits they are taking and may cut the rate if it becomes too popular. Savers should keep an eye out: if a market-leading rate appears that suits their requirements, quick action is required as it could disappear as quickly as it arrived.”

• Several publications reported on Yorkshire Building Society launching interest-only mortgage deals – including The Times, Fair Investment, Your Mortgage and Mortgage Solutions – and in doing so picked up on our previous research into the area, in which we found that the number of interest-only mortgages available has doubled in the last six years.

• Elsewhere, Mortgage Strategy covered our regular mortgage rate update, while Landlord Zone quoted our data in a piece on the UK rental market, as did Financial Reporter on a piece covering later life lending. Similarly, Which? also used our data to inform a feature on the rising number of over-65s taking out buy-to-let mortgages, as well as on a story covering cashback mortgages, highlighting how often our expertise is used.