House Prices
Lenders are more buoyant about 2012
The past month has seen lenders move up the risk curve with more 90% LTV loans now being offered but what do estate agencies and surveyors think?
Smaller lenders are getting a lot of
by David Copland, chief executive, Pink
In the past month we have seen a lot more availability of 90% LTV mortgages as lenders move up the risk curve looking for more margin. Lenders are gearing themselves up for 2012 and despite the negative picture portrayed in the media, some lenders are becoming more upbeat about the size of the market next year. The biggest unknown to affect next year
is, of course, the situation in the eurozone, and no one can predict with any accuracy what will happen there. But if the situation stays relatively stable there are reasons to be optimistic that the UK mortgage market will grow slowly as lenders expand their criteria a little and we see the return of product innovation. There will be a lot more competition in
the buy-to-let market next year as again lenders search for greater margin. Many lenders are looking to expand the amount of buy-to-let they do – especially to professional and semi-professional landlords, those with five properties or more. Other lenders, such as Santander, are looking to enter the buy-to-let market and Woolwich has stated that it wants to quadruple its buy-to-let lending over the next year.
44 mortgage introducer DECEMBER 2011
traction now with some noteworthy product launches, for example Aldermore’s 100% LTV mortgage. We now need to work to move the perception that first-time buyers need to have a 25% deposit. Finally we are all waiting with bated
breath to see what will happen with the Virgin takeover of Northern Rock and how much focus it will place on the intermediary market.
SurveyorS view The average house price in England and Wales now stands at £220,056. This is up 0.2% compared to September when the average house price didn’t move at all, but is a slight drop of 1.3% down from the average of £221,540 that we recorded a year ago. This means that, to all intents and purposes, house prices have remained static. The positive here is that it should be easier for first-time buyers to save for a deposit without run away house prices and the growing number of high LTV mortgages should help that process still further. According to LSL’s Acadametrics
House Price Index, house prices in London rose 2.5% in the three months to October, but fell in all other regions. The strength of London’s economy combined with a massive influx of foreign investors has pushed the capital’s prices in the opposite direction to those in the rest of
the country, where tight mortgage finance and an uncertain economic future have convinced lenders to continue with a cautious approach to residential lending. Outside the capital, house prices have
fallen by an average of 2.7% since October 2010. By far the biggest falls were seen in the North of England, where annual prices in the three months to October fell by 7.9%. The next fastest fall was seen in the West Midlands at 4.5%, meaning prices in the North are falling about twice as fast as any other region. The influx of money in the capital
appears to be due to large numbers of overseas investors buying property in London to keep their money safe seemingly inspired by the Arab Spring and the eurozone crisis.
eState agency view Typical seasonal activity seems to be out of the window this year. Throughout the year the market seems to have bucked the seasonal trends that we are used to. In August, traditionally a quiet month, there was a record level of activity; now after a very busy September, house buying and selling transactions dropped away by a steep 6%. Again this bucked the usual trend in which we would have expected to see a rise in transactions of about 2.5% in October over September levels. However the positive is that comparing
the three months July to September 2011 with the same three months in 2010,
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