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Brian Murphy is head of lending at Mortgage Advice Bureau
Building momentum
with new opportunities Brian Murphy has the latest on mortgage lending.
C
orporate envelopes, landlords and fi rst time buyers? What? While hotly anticipated,
the main announcements for the housing market had already been trailed well in advance and the actual Budget speech threw up little in the way of surprises. At the top end of the market,
the two big announcements were the 15% rate that will be payable for those selling through a corporate ‘envelope’, and that Stamp Duty has jumped from 5% to 7% on properties worth more than £2m bought by individuals. While not a ‘mansion tax’ there
were reports of a dramatic drop in activity in the South East and particularly parts of London, both of which have been very busy of late. For the mass market, the
Government’s support for fi rst-time buyers by using its balance sheet to underpin the NewBuy scheme is to be welcomed as it could create positive ripples all through the market. Mortgage Advice Bureau
recently merged with Mortgage Talk creating a broker with more than 500 advisers, and this combined entity will be a very strong national player in the new build area. As such we remain optimistic that we will see strong mortgage activity levels for the rest of the year. The fall in the CPI is now
fi ltering through and this will lead to an increase in consumer
lower than 2008 levels, average rates have been moving marginally upwards in the last couple of months, particularly on two- and three-year fi xed rates. The average two-year fi x in February was 4.36% compared to 4.27% in January, and the average three-year fi x was 4.63% in February from 4.53% in January. The announcement of an increase to their SVRs by the Halifax and the Bank of Ireland came as a surprise, and with RBS also increasing the rates on certain specifi c products we are expecting to see a surge in borrowers investigating remortgage opportunities in the next fi gures. We are also expecting greater
“While it wasn’t a mansion tax there were reports of a dramatic drop in activity.”
confi dence on people’s disposable incomes. Interest rates remain at historically low levels and purchasers have been out in greater numbers this year, suggesting that more discretionary buyers feel the housing market is more stable and are re-entering the market. Our February data showed the
total number of mortgage applications was up 20.9% on January (which itself had seen a 52.7% rise in activity compared to December 2011). The end of the
Newbury agencies merge
Clive Willis has merged with Jones Robinson. The independent, family run business has been trading in Newbury for 25 years but it’s time for a change says Founding Partner Clive Willis: “We’ve really enjoyed our time in the property industry but with two directors retiring and the third changing his career path completely, it was time to hand over the reins.”
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Paul Broomham, Lettings Director at Jones Robinson comments: “We’re always looking at ways to organically grow our business and we were extremely fl attered when Clive chose us to be his partner of choice. In fact it is the second time in 12 months that we have merged with a fellow agent due to the partners retiring.”
TheNegotiator ● May 2012 ● 15
Stamp Duty ‘holiday’ for fi rst-time buyers and increases to lenders’ SVRs both contributed to year-on-year applications being 13.5% higher than 2011. Similarly, the latest data from the Council of Mortgage Lenders (CML) shows February was the seventh successive month to see higher year-on-year lending. In February gross mortgage lending was £10.7bn, up 14% from February 2011 (£9.4bn). While mortgage rates are lower than February 2011, and much
activity in buy to let from landlords in coming months. There is currently greater choice and competition among lenders and their products, and we are seeing landlords looking to use equity from their existing portfolios to grow their portfolios. Activity for purchase buy-to-let mortgages is up 30% compared to February last year and cumulatively by more than 44% against the same period in 2011. With aff ordability continuing
to improve we see increased levels of activity fi ltering through in all areas in the coming months although the ending of the Stamp duty exemption may discourage some FTBs in the short term while they come up with the additional funds to cover the reintroduction of the charge.
TheComment
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