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Brian Murphy is head of lending at Mortgage Advice Bureau
Lending: a strong(ish) start to the year
M
ortgage activity and lending enjoyed a strong start to the year – compared to
last year. A number of factors explain why this is the case, and other factors which suggest this is not just a blip. But it is only the first quarter and we should not get too carried away with what the rest of the year will bring. While the latest figures from the Council of Mortgage Lenders (CML) show gross mortgage lending in January was a sobering £10.5bn, it was nonetheless 10% higher than January 2011 when just £9.5bn was lent. Our own figures mirror this trend and the number of mortgages we arranged in January 2012 was 25.8% higher than in January 2011. However, while the CML found gross lending to have fallen 14% on a monthly basis from the £12.2bn lent in December 2011, our volumes in January showed a strong increase from December 2011, bouncing back 52.7%. Activity levels in January and December are always difficult to predict. A seasonal decline in business levels is to be expected as borrowers turn their attention to the festive period, but in the last few quarters we’ve seen strong demand from borrowers and lenders responding with attractively priced products. We have seen that over the last
year the average year-on-year rates have fallen, especially for fixed rates. The average two-year fixed rate deal in January 2012
buyers and those with low levels of equity. The number of 95% LTV deals currently open to first-time buyers is the highest it has been for four years, with 59 deals currently available from 21 different lenders. To put this in context, there were just 25 in February 2011, nine in 2010, and three at the same time in 2009. A lot has been made of the
“The Governor of The Bank of England expects the recovery to continue and interest rates won’t be rising anytime soon.” Our own data shows the
was 4.27% compared to 4.4% at the same point twelve months earlier, Average three-year fixed rates have fallen to 4.53% from 4.99% and average five-year fixed rate deals are down to 4.61% from 5.33% over the corresponding period though average two-year tracker deals were slightly higher at 3.5% up from 3.47%. It is too early to say that the pessimistic but realistic predictions of a flat market in 2012 will be proved wrong, but sentiment around the mortgage market has improved.
Zoopla raise £10k for Shelter
At 7.30am on 1st March, 16 staff from Zoopla, led by CEO Alex Chesterman, took part in Shelter’s Vertical Rush – climbing the 920 stairs of Tower 42 in the City of London. They raised £10,000 in much-needed cash to help Shelter’s efforts to battle homelessness and bad housing. Last month Zoopla announced a partnership with Shelter, and committed to raise at least £25,000 for Shelter in
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2012, a target already surpassed! Alex Chesterman said, “The Zoopla team is taking our effort to support Shelter very seriously and I am delighted that we managed to complete this challenge safely and have been able to raise the level of funds that we have so quickly. We are very grateful to those who supported us to help Shelter continue with its outstanding work.”
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average deposit put down by mortgage applicants in January 2012 was £56,167, down slightly from £57,088 in December but up 7.4% on the same period in 2011 (£52,284). And while the average incomes of purchase borrowers was almost unchanged between December 11 and January 12, they have risen 5.81% since January 2011. Another key change has been
the growing number of higher loan-to-value products being made available to first-time
removal of the stamp duty concession for first-time buyers on 24 March, with the recent increase in activity the result of buyers seeking to complete before the deadline. This may be true to a degree, but official figures show the stamp duty holiday has had little impact on first-time buyers’ numbers until recently so I believe the recent increase in activity owes much to the availability of more products requiring less deposit. In the last month the Governor
of the Bank of England has commented that he expects the recovery to continue, although the economy may “zigzag”. One thing he was confident about was that inflation would continue to fall back towards target and interest rates would not be rising any time soon. The markets this year seem less jittery about the eurozone and stories that would have caused freefall last year have barely registered this year. Taken together this is good news for the housing market and should hopefully provide the basis for continued activity and appetite among both lenders and borrowers.
TheComment
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