News Review

£300bn funding shortfall needs resolving - fast

With politicking by all parties reaching fever pitch

asMortgage Introducer went to

press one thing that became clear was that whatever the outcome there are going to be severe obstacles to climb over the coming months. With the council of

mortgage Lenders confirming that there will be a £300bn funding shortfall in the mortgage market as a number of government backed financial initiatives come to an end the outlook is far from rosy. However according to the

cmL gross mortgage lending was an estimated £11.5bn in march, a 24% rise from £9.3bn in February and a 3% rise from £11.2bn in march 2009. gross lending for the

first quarter of 2010 was an estimated £29.5bn, a 24% decline from the fourth quarter of 2009 (£38.9bn) and a 9% decline from £32.4bn in the first three months of 2009. despite this being the lowest quarterly lending total since the first three months of 2000 it remained very much in line

with the cmL’s forecast of a gross lending total of £150bn for 2010. cmL economist Paul

Samter said: “overally housing and mortgage activity remains subdued, but is comfortably higher than in the depths of the recession a year ago”. despite the increase in

activity late last year and a subsequent fall early this year – due to the end of the stamp duty holiday – the underlying position has barely changed.

Warning

“However, the longer- term problems facing the market remain and will limit the speed of recovery in the housing market and wider economy,” Samter warned. “Financial institutions still face the prospect of around £300bn of official support schemes beginning to end from next year, and will need to find alternative funding sources. this will likely limit how much new funding can be made available to the housing market.” But it wasn’t all doom and

Halifax affirming their position in the 90% LtV market. abbey for intermediaries

Paul Samter, CML

economist

gloom and the prospect of a severe lack of funding has done little to dampen house prices. London estate agent marsh & Parsons revealed that house prices in five boroughs had recovered dramatically. in the city of Westminster average house prices are nearly 10% higher than in July 2007 and in Kensington & chelsea prices had risen by almost 6.5%. While prices in camden, Hackney and Hammersmith & Fulham have also surpassed the level reached at the previous zenith nearly three years ago.

90% LTVs

elsewhere the pressure on LtVs appeared to be easing with both Santander and

launched a two-year fixed rate deal at up to 90% LtV, exclusively for brokers. available for purchases at 6.75% and with a £495 up front booking fee afi said the product represented another step in its “commitment to offering higher LtV products in the intermediary market”. although it was good news

to see 90% LtVs hitting the headlines some brokers remained angry that dual pricing remained an issue. abbey also offers a 5.99% 90% LtV three-year fix direct. meanwhile openwork was offering an exclusive 90% LtV two-year 6.49% fixed-rate from Halifax. the deal also offered £500 cashback. Paul Shearman, mortgage, protection and general insurance proposition director said: “this product could provide the ideal solution for borrowers looking to purchase at a higher loan to value and at a great rate.”

Gross lending for house purchase up, says BoE

gross lending for house pur- chase increased in march according to data from the major uK lenders, and their mortgage approvals for house purchase rose after falls in the previous three months. that was according to the

latest credit conditions Sur- vey from the Bank of eng- land. the availability and pric-

ing of new secured credit was broadly unchanged in 2010

Q1, according to lenders. demand for secured credit for house purchase was re- ported to have fallen over the same period, largely reflect- ing one-off factors, but was expected to increase in Q2. the report said: “in recent discussions, most major uK lenders reported that effects from the severe weather around the turn of the year and the removal of the stamp duty relief at the year end had dissipated and were not

4 mortgage introducer MAY 2010

affecting approvals or lend- ing in march. “Looking forward, the ma-

jor uK lenders expected the impact of the new stamp duty land tax relief announced in Budget 2010 to have some positive impact on mortgage activity from first-time buy- ers, though obtaining the deposit for house purchase - rather than the cost of stamp duty - was perceived by some lenders to be the greater con- straint to house purchase.”

the flow of net lending to

uK businesses remained neg- ative in February, though less so than in January, according to the survey. Business con- tacts of the Bank of england’’s network of agents continued to report that credit availabil- ity was easing, though by less for smaller businesses than their larger counterparts. in recent discussions, the major uK lenders expected corpo- rate credit demand to remain subdued in coming months. Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48