News Review: Service
Stormy economy hasn’t discouraged competition by
Phil Cliff, director of mortgage products, Abbey for
Intermediaries
it’s been another interesting month for both the uK mortgage market and the wider uK economy. the latest Bank of england stats show that the number of house purchase approvals increased to 52,400 (seasonally adjusted) in august, up from 49,600 in July and the strongest volume for 20 months. remortgage activity also picked up, increasing from 31,700 in July to 34,700. despite the relatively strong august data, house purchase approvals in the first eight months of the year were 1% lower compared with the same period in 2010 but more encouragingly, remortgage activity was nearly a fifth higher than the same period last year. in house price news, nationwide’s latest house price index showed house prices increased by 0.1% on a monthly basis in September, with the average house price now standing at £166,256, up 0.3% year on year.
Consumer confidence in other economic news, we saw base rate held at 0.5% for another month, while cPi inflation rose to 4.5% in august, up from 4.4% in July. meanwhile, the latest gFK/ noP index of uK consumer confidence showed faint signs of improvement, rising one point between September and august, but at minus 30 it remains in firmly negative territory. Further afield, the
eurozone continued to face its own challenges not helped by an unexpected jump in inflation to 3% in September, up from 2.5% in august and the fastest acceleration in its rate of inflation in almost three years.
Competitive pricing closer to home, we’ve continued to see keen pricing in the intermediary mortgage market, with pricing for 5-year fixed rate deals at their lowest ever level. Fixed rate products in general are very competitively priced across the market and this has supported an increase in remortgaging activity as intermediaries and their clients look to take advantage of some of the great rates on offer. Borrowers are realising that rates aren’t always going to be this low and this has prompted those looking for the security and peace of mind of a fixed rate deal to lock in now, with many
Innovation,
innovation In other news, Abbey for Intermediaries recently held an inaugural forum for some of our key account partners on mortgage products and fighting financial crime. The event looked at product developments in the market place and best practice in working together to combat fraud, and was well received. One of the most interesting areas of discussion during the day was about how we have seen a lot more innovation in the market this year.
16 mortgage introducer OCTOBER 2011
“Pricing for 5-year fixed rate deals is at their lowest ever level. Fixed rate prod- ucts in general are very competi- tively priced
across the market and this has sup- ported an in- crease in remort- gaging activity”
choosing to opt for a longer- term product rather than the more traditional 2-year fix. another trend we have seen
over the past three months has been more competitive pricing in the above 75% loan to value sector, supported by lower swap rates and increased competition in the market. this is good news for
Our seven-day key account exclusives were highlighted as a good example of innovation on the product front while on the service front, developments such as our service page and new document upload tool were among the industry advances welcomed. The mortgage industry has always been quick to adapt to changes that make it quicker and easier to do business. The fact that the majority of documents submitted to us are now uploaded rather than faxed following the launch of our upload tool in June is
borrowers with lower equity in their properties or smaller deposits and we are pleased to have been able to continue to support the intermediary market with the launch of some new deals across our range and rate cuts.
Offset one area of the market that’s been enjoying somewhat of a resurgence of late is the flexi offset sector and we’ve seen strong demand for our flexi offset offering over the past six months in particular. the product is proving popular again with savvy borrowers who are looking for a lifetime tracker that allows them to overpay and underpay, and provides them with a way of making their savings work harder for them. With base rate remaining at 0.5% and some great flexi offset deals available in the market today, we expect demand for this type of mortgage to remain strong well into 2012.
testament to this.
As the nights get darker and the countdown to Christmas begins in earnest, the final quarter of the year looks set to offer the same challenges but also the same opportunities to the market as the rest of the year. At Abbey for Intermediaries, we will be working hard to continue to support the market with new products and good service. We will be unveiling a number of exciting new enhancements over the coming months to help make it even easier for intermediaries to do business with us.
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