News Review: Lending
Let’s hope Spring blip is the last this year
by David Finlay, intermediary channel director, Barclays
gross mortgage lending totalled an estimated £11.3bn in may, according to new data from the council of mortgage Lenders. this represented a 12% increase from the £10.1bn lent in april and was 1% higher than in may 2010. the council of mortgage
Lenders has also increased its gross mortgage lending forecast for 2011 from £135bn to £140bn. it is predicting gross mortgage lending of £150bn in 2012. the trade body has also
increased its net lending forecast for 2011 up from £6bn to £9bn. it adds that it believes lenders have made good early progress in repaying the funding advanced through official support schemes and large- scale refinancing of wholesale funding and the availability of credit to support mortgage lending remains constrained but has eased a little. We all realise that april’s
lending figures were hampered by the plethora of bank holidays so whilst the may increase is hardly unexpected it still comes as a welcome boost. Let’s hope that the market can sustain this momentum and hopefully not experience any more ‘blips’ throughout the rest of the year. increased innovation, competition, confidence and stability will ensure the industry remains on target to hit the cmL’s revised forecast and maybe
even push this figure slightly higher.
Remortgage remortgage lending is said to have fallen in april. data released by the council of mortgage Lenders suggests there were 24,700 remortgage loans worth £3bn advanced in april, down from 34,100 loans worth £4.1bn in march, but up fractionally on april 2010, up 1% by number.
Consumer insight research from Legal & general and the association of mortgage intermediaries’ shows that 3.4m borrowers plan to apply for a mortgage in the next 12 months, including 1.3m home buyers and 1.6m prospective remortgagers. However, despite the fact that 81% of borrowers are keen to go to one place to get a mortgage instead of trawling the market, just 44% said they would approach a broker first. these
somewhat
disappointing figures only serve to really underline just how the remortgage market continues to be held back by a wait and see attitude. unfortunately this is not only via those mortgage holders sitting on their SVr, some intermediaries are also holding back and not targeting such clientele and this is an attitude that must change in order to really maximise the fantastic opportunities
currently available in this market.
Economy the latest figures from the office for national Statistics show that the consumer
8 mortgage introducer JULY 2011
Prices index remained at 4.5% in may, unchanged from april. the retail Prices index, which includes mortgage interest payments, also remained unchanged at
5.2%.the onS says although unchanged overall, there were significant upward and downward pressures on cPi annual inflation between april and may. on a positive note uK
unemployment fell by 88,000 in the three months to april this year to 2.43 million, the biggest drop since the summer of 2000, according to the latest figures from the office for national Statistics. the unemployment rate was 7.7%, down from 7.9% in the previous quarter. external
economic
factors continue to have a lingering effect on the strength and stability of the mortgage market with existing and potential homeowners directly feeling the effects of the current economic environment. the latest royal institution of chartered Surveyors (ricS) uK Housing market Survey suggests that a combination of fears over the economy and the availability of mortgage finance were the main factors that continued to depress housing activity in may. of course we can’t
influence many economic factors but it is vital for lenders to continue to work hard to help bridge the availability of mortgage finance gap in a responsible and sustainable manner.
Regulation the Financial Services authority has revealed that
it plans to turn its treating customers Fairly principles into a set of rules. the FSa introduced its tcF guidelines in July 2005, signalling a move towards a more principles-based approach to regulation. But in feedback to its
discussion paper on product intervention, it says it wants to create one set of rules for firms, which will incorporate tcF and the FSa’s Principles for Business guidelines. the FSa adds that it remains of the view that a product intervention approach is an essential means of achieving an appropriate level of consumer protection.
Employment the FSa has also published its annual report for the year 2010/11, in which it warns there will be more action taken against firms for treating customers in arrears unfairly. in its report it says: “in
January we announced the publication of the 101st mortgage broker prohibition. We have also taken tough action in mortgage arrears cases where firms have not treated customers in arrears fairly and failed to give consumers the protection they deserve.” it also added: “there will
be further action in this area in the coming year.” tcF remains at the
forefront of the FSa regime and it’s vital that the intermediary market continues to take this initiative seriously and incorporate it to form the bedrock of all propositions large and small.
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