News Review: Lending
Quality product innovation needed for boost
by David Finlay, intermediary channel director, Barclays
in truth when evaluating the council of mortgage Lenders gross lending figures for october there is not too much to really add to the words of cmL chief economist Bob Pannell when he commented: “the underlying picture in the housing and mortgage markets has not changed dramatically over recent weeks. the immediate direction of house purchase activity is a little unclear, although the story for remortgages, with strong year- on-year increases in activity this year, is for the time being more straightforward.” at an estimated £13.1bn
in october, a 4% decrease from £13.7bn in September and a 13% increase from
£11.6bn in october 2010, the figures reflect a subdued arena but one which still presents some opportunities for intermediaries especially within the remortgage market.
Products the old saying about quality not quantity certainly maintains a ring of truth when it comes to the volume of products available to the intermediary market. But what is encouraging is that more and more lenders appear to be embracing this particular sector. this is illustrated by research from Precise mortgages which found that the proportion of mortgage products available via intermediaries increased between august and october. the total number of residential mortgage products was said to have increased by 10% between august and october to
October sees pre-Xmas pick up in transactions
october is an interesting month as when speaking to estate agents many cite this as the final opportunity to get a deal in place to complete before christmas. So maybe it’s little wonder that the latest housing market survey from the royal institution of chartered Surveyors suggests that housing market activity picked up in october, with both property sales and buyer demand increasing. in october, 8% more chartered surveyors reported that newly agreed sales rose rather than fell, representing a rebound in activity after the past month’s fall of 3% and the best reading since april 2010. Some surveyors attributed this increase to
growing realism from sellers, who appear to be more willing to take lower offers to secure
8 mortgage introducer DECEMBER 2011
when he says it’s up to intermediaries to be proactive in targeting these borrowers and demonstrating the benefits of visiting a broker.
reach 2,784. of these, 39.7% were only available through intermediaries in october, up from 38.9% in august, while 36.2% were only available direct, down from 38.3%. 24.1% of products were available through both channels. alan cleary, managing director at Precise mortgages, said: “High street lenders are losing ground to brokers in terms of the number of products they can offer borrowers but the amount they spend on marketing and promotion ensures that many borrowers believe the high street is the only option for them.” there is certainly an element of truth in this statement and i echo his sentiments
a sale. completed sales also rose slightly, to an average of 15 per surveyor, over the past three months. While still muted, this represents the strongest level since april. this is encouraging news but it will also
be interesting to observe what, if any, the recent and somewhat chaotic events in the eurozone will have on buyers’ confidence and indeed on lending conditions in general. Let’s hope any impetus is not stunted too much in the coming months and that this disorder is sorted out sooner rather than later. equity release remains a viable sector for
some but one that will not be appropriate for everyone. as such it’s vital that the advice process is highly professional and all the legal implications and consequences are fully understood in order to safeguard a family’s future.
SVR the term standard variable rate is anything but standard for intermediaries trying to prise homeowners away from some seemingly attractive rates. However, the past few weeks have worked to serve notice to any borrowers who weren’t aware or conveniently ignored the fact that SVrs are open to any kind of movement, irrespective of whether there has been a change in the official bank rate. the recent SVr movement was kicked off by the Bank of Scotland and the mortgage Business increasing their standard variable rates up from 4.84% to 4.95%, citing the increased cost of funding for these rises. in contrast norwich & Peterborough slashed its SVr by 0.36% following its merger with Yorkshire Building Society. in addition there were the reported 14,000 mortgage customers
transferring
from Bank of ireland to the mortgage Works as part of a loan book sell-off who are facing an almost 2% increase in their SVr. So whilst this might not be such good news for some, for intermediaries this just emphasises the opportunities available in making sure any clients sitting on SVrs are aware of such movements and to reaffirm the potential savings attached to highly competitive remortgage deals currently available.
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