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UCB to launch product enhancemants

Amanda Jarvis

January 13, 2005

These initiatives include new, lower fixed rates, reduced fees on all self-cert remortgages and a brand new
Buy-to-Let Tracker mortgage with no early repayment charges.

FIXED RATE REDUCTION
UCB Home Loans will be launching a range of very attractive fixed rate deals priced at 5.60% across the board. The new rates will be up to 0.49% lower than current deals:

– Self-Certification 2 Year Flexible Fixed Rate available at 5.60%, 7.1% APR variable
(was 5.89%, 7.1% APR variable)
– Self-Certification 3 Year Flexible Fixed Rate available at 5.60%, 6.9% APR variable
(was 5.99%, 7.0% APR variable)
– Self-Certification 5 Year Flexible Fixed Rate available at 5.60%, 6.7% APR variable
(was 6.09%, 6.9% APR variable)
– Buy to Let 2 Year Flexible Fixed Rate available at 5.60%, 7.1% APR variable
(was 5.89%, 7.1% APR variable)
– Buy to Let 5 Year Flexible Fixed Rate available at 5.60%, 6.7% APR variable
(was 6.09%, 6.9% APR variable)

“The reductions offer a particularly attractive rate on these products,” said UCB Home Loans managing director, Charles Reed. “This is the first time we have offered a single interest rate on the 2, 3 and 5 year fixes. It gives borrowers a choice in the length of time that their repayments are fixed, without variations in the rates on offer influencing their decision.”

REMORTGAGE OFFER
A remortgage offer on self-certification mortgages will also be launched on 18 January 2005. Self-certified borrowers remortgaging to UCB Home Loans will benefit from a free property valuation and UCB Home Loans will also waive the £75 reservation fee. This offer is available until 31 March 2005.

The remortgage offer is launched at a time when remortgages are running at historically high levels, and January is a typical month for people to reassess their finances.

Charles Reed, managing director of UCB Home Loans, said: “Figures from the Council of Mortgage Lenders show that remortgaging increased by 255% between 2000 and 2003 and we expect it to account for around 43% of all new mortgages in 2005. There is a pool of over 1 million borrowers who are due to come off mortgage deals in 2005 and 2006 and a large proportion of these will be looking to remortgage in order to obtain a better deal.

“The market of self-employed people, contract workers, small business owners and those with more than one stream of income now stands at just over 10 million people,” he said. “This forms the core of the self-cert sector of the market in which UCB Home Loans specialises and we are expecting continued demand for remortgages from this sector over the next couple of years.”

FREEDOM WITH A NEW BUY-TO-LET MORTGAGE
A new Buy-to-Let mortgage with no early repayment charges is being launched on 18 January. The mortgage is a 2 Year Flexible Tracker. Repayments will be at 1.75% above the Base Rate for the first two years, giving a current rate of 6.50% (7.3% APR variable). The main benefit of this new mortgage is that no early repayment charge applies, even during the initial 2 year benefit period*.

“We are in the process of expanding our activity in the buy-to-let sector,” said UCB Home Loans managing director, Charles Reed. “Whilst self-certification lending forms the major proportion of our mortgage portfolio, around a quarter of our new lending is now undertaken on buy-to-let properties.

“Increasing the flexibility of our buy-to-let product range plays an important role in our marketing strategy for 2005,” he said. “A tracker product with no early repayment charges is relatively unusual in the buy-to-let arena, and we have designed it to enable landlords to more easily re-evaluate their finances and portfolio of properties, should they choose to do so.

“Buy-to-let lending has grown rapidly in the UK since the turn of the millennium, and the total value of buy-to-let mortgages outstanding is now about ten times higher than it was five years ago,” said Charles Reed. “The industry had about £5.4 billion outstanding on buy-to-let mortgages at the beginning of 2000 and, whilst the latest figures have not yet been announced by the Council of Mortgage Lenders, we estimate the total to now be in the region of £50 billion.”


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