News Review: Products
Product competition driving busy brokers by
Rob McCoy, senior product and communications manager, Sesame Bankhall Group
Wow! Well, what a month we have just had, with the PMS product team having just had one of their busiest months of the year. Despite the Bank of England holding the base rate for the 42nd consecutive month lenders have been very active repricing their product ranges, launching new prod- ucts and talking about exclu- sives again. So why the sud- den activity? I believe this is due to sev-
eral reasons. As we enter the final third of the year, lend- ers will be keen to start put- ting in the ground work to build activity and pipelines for next year. Te Govern- ment’s Funding for Lending Scheme has been too good for some lenders not to take ad- vantage of even if they don’t need the capital as they have been attracting a good level of retail savings to work with. Tat said, some lenders have decided not to apply yet and some won’t qualify for it.
Service on track Conversations with lenders over the past few weeks have also pointed to simply want- ing to lend more aſter resolv- ing service issues. At the start of last month, we saw some lenders increase
announce plans to their SVRs which
sparked a number of remort- gage campaigns and specific remortgage products. Against the backdrop of
weak demand from financial- ly squeezed households, pub-
lic sector spending cuts, tight credit conditions and the Eu- rozone crisis, one lender has revised its UK forecast and now thinks it is unlikely the BoE will raise the Bank Rate until well into 2016. Te data from Trigold
shows there was an increase of 152 first-time products in the intermediary market at the start of September. De- spite this, overall interme- diary products
started the
month down on August but there were still nearly three times as many deals as via any direct channels. As September started, we
saw the continued rate war for rates below 3% between the likes of HSBC, Abbey, Nat- West and Woolwich. Unfor- tunately, unless your clients have a 40% deposit you are unlikely to benefit from these rates. Whilst the competitive- ness of such deals is great for generating some headlines,
are they actually going to help bring new borrowers into the market or encourage people to remortgage from their current deals? I think not, at least they won’t make a great deal of difference to the over- all gross lending figures. Tis is because the market needs lenders loosening their crite- ria and raising loan to values as first-time buyers still only have small deposits and there is a growing number of mort- gage prisoners who want to move but can’t.
Products Our recent product research showed that during August, sales of short term main- stream products – one to three years - continue to be preferred. However, sales did decrease on 2-year term products by 9%, whilst 3-year products increased by 5%. Tese products still reign as one of the favourite choices
Increase (decrease) on previous month
for clients, with 72% of sales during August. Sales of 5-year products increased to a year- long high of 16% of products sold in August, compared to 11% in the preceding month. Nationwide’s range of 5-year term products were once again particularly popular. Te increase in 5-year prod- ucts is hardly surprising as we currently have some very at- tractive products on the mar- ket. At the start of the year, Trigold had 445 fixed rate products on their Prospector system, August started with 988. Te buy-to-let research yet
again mimicked the findings from mainstream analysis, in that short term products – one to three years – continue to be the popular choice for clients. August saw Te Mort- gage Works and BM Solutions at the top of the fixed rate product sales with Woolwich and Abbey leading the most popular tracker rate products.
The product information below was the number of products as displayed on Trigold Crystal’s Prospector system Direct
Intermediary FTB Purchase
Remortgage BTL
1218 1151 1278 114
BTL Remortgage 122 Total 3883
Residential Term
0-3 years 3-5 years 5 years +
10 MORTGAGE INTRODUCER OCTOBER 2012 Fixed
2707 1464 988
Increase (decrease) on previous month
1482 859 618
Tracker
1094 399 273
Source: TrigoldCrystal 03.09.2012 products
www.mortgageintroducer.com
Increase (decrease) on previous month
723 281 134
58 67 75 -2 3
1948 2950 3039 991
1027 9955
BTL Fixed
444 168 109
Increase (decrease) on previous month
-6 6 5
Tracker
182 46 46
Increase (decrease) on previous month
-2 -1 -1
Increase (decrease) on previous month
152 -119 -89 1
-6 Total
3166 4101 4317 1105 1149
13838
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