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The Power Hour


have an office anywhere, how you get over that hurdle that is the challenge. JW: Talking about service, in the good ol’ days the issue was more about getting the right price, saving money and repayments. Now there’s also the underwriting issue which is where a broker can help you out with much more. If you go into a bank or look at Moneyfacts, a lot of the time they’ll give you a headline rate but what’s the underwriting criteria? Brokers have a much better idea of where you can get a deal so apart from best price, it’s also getting the actual product especially for first-time buyers. Tony Ward: You have to remember than when a first-time buyer is buying a house, they’re buying a house and not a mortgage. So the question is can I buy this house and how much can I borrow? Do I have the income to service it? That’s really what they’re bothered about, can I get a mortgage? NS: But the biggest issue for the first-time buyer is a deposit. Affordability is at an eight year low according to the Council of Mortgage Lenders. The average first-time buyer had to put down 20% deposit last year. All of the schemes that we’re talking about, First Buy, Mortgage Indemnity Guarantee, Castle Trust, builder help and parental help are all about the deposit is the biggest issue holding back the first-time buyer market in this industry. So that’s holding back house builders because they know they can’t pull off six or more flats at £250,000, they cannot find the people to put down the £50,000 down there and now they’ve got to put down stamp duty as well. That’s what’s holding the market back. All these fancy schemes are about the same thing. If you look at the way in which the builders’ balance sheets and the rest are being used, they’re all about getting to 95% loan to value lending. The FirstBuy scheme and the MIG scheme are all about getting the consumers to put the 5% in as they always have done in the past. It’s the first time in this recession and the credit crunch where 95% lending hasn’t been available for first-time buyers. I’m delighted that the Ipswich is now offering 95%, I’m


delighted Skipton are doing 95% because if these smaller building societies and these smaller lenders and they start pushing the bigger lenders into doing that. I’m thrilled that Halifax is doing 90% for lending to new homes this week. That’s all in the right direction. It is that which will move the market. It is that which will move the mortgage industry and enable people to buy the houses that they want.


I think this year could be quite


interesting because I can see the mutuals starting to get stronger. TW: The bottom line is that the big lenders don’t really want to do first-time buyer lending unless you really had to. The fact that they are and you have some saying they’re allocating to it is a political thing. That suggests to the consumers that the natural lenders are the smaller lenders, smaller banks and building societies and maybe the other niche lenders coming in, they are the natural lenders. When you have more smaller lenders trying to diversify the market, you need someone like a broker to navigate the consumer through it.


36 MORTGAGE INTRODUCER FEBRUARY 2012


THE INDUSTRY WAS DISAPPOINTED THE GOVERNMENT DECIDED TO END RELIEF ON STAMP DUTY FOR FIRST-TIME BUYERS BUYING UNDER £250,000 – WHAT IMPACT WILL STOPPING THIS HAVE FOR FIRST-TIME BUYERS? NS: We’ve been very vociferous about this. We were very disappointed that government ended stamp relief. We were very clear on Countrywide’s stance on this. The impact this will have is that it will be more money that first-time buyers will have to find. So if they’re already finding 20% then they have to find this as well. Anything that means they have to find more money and will it more difficult for them to get on the ladder, is a bad thing. JW: It’s less of an issue than 90% LTVs versus 95%. It is an issue and I agree that stamp duty should be on the sale of properties. TW: The issue we have in the housing market and the economy is all about confidence. It’s not stamp duty, it’s not availability of products, it’s actually about


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