House Prices
outlook positive for advisers
More competition is welcome in the mortgage market while renting remains key
by David Copland, chief executive Pink
The financial services market is increasingly vibrant at the moment. Lenders have significantly increased the number of mortgage products that are available and are being more innovative with the type of mortgages that they are launching onto the market. We’ve also seen an increase in the number of higher loan to value mortgages that are creeping back into the market. This is gradually making it easier for
advisers to place mortgages and certainly within the Pink network we have seen a significant increase in applications over the last quarter, with a particularly noticeable surge in June. However many potential borrowers are
still struggling to find enough money for a deposit, which is playing into the hands of landlords, so expect to see more products coming into the buy-to-let market. I expect to see an increase in the number of small investors who will be focusing on the bottom of the market, which will make it increasingly challenging for first-time buyers as investors will usually be able to raise the deposits that first time buyers cannot. The key concern right now is what
happens in the world economy and the risk of a country defaulting, which may have the effect of banks withdrawing their funding as they shore up their capital positions. However with that proviso, the outlook is pretty positive for mortgage advisers. The “new wave” of short term sales
is putting clients in the position of take it or leave it, too much pontificating and the deal has gone. Brokers are now contacting their clients with this
• Prices down 0.8% in June, as the highest value transactions drop following stamp duty rise in April
• Transactions up 20% in June, much faster than usual seasonal uptick, although activity overall remains quiet
• Rents rise by 0.7% to £701 in June – an annual rent inflation at 4.1%
• London landlords see average rents reach record high of £1,006 per month
• Total annual returns drop to 1.3% but an investor could expect a total annual return of 2.3% in next 12 months
• Tenant arrears drop by 18% as total amount of rent late or unpaid falls from 11.5% to 9.3%
new message, updating factfinds in the readiness of moving swiftly when the right product becomes available for their client.
Surveyor view House prices dropped quite significantly,
48 mortgage introducer AUGUST 2011
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