Mortgage Broker Manchester

3 September 2014 | By Bob Hunt, Chief Executive, Paradigm
There appears to be a surfeit of “analysis”, “data” and “research” at the moment all focused on ‘outlooks for the future’.
All the press activity is focused on buyer/seller confidence, house price and interest rate anticipation, or giving mortgage availability.
The summer can be the silly season but it does appear that in a market which appears to be moving along quite nicely, there is a concerted focus on the perceived difficulties around securing finance and buying a home.
Why? It could have something to do with overall mood music – interest rates to rise, flat wage levels, loans harder to come by, house price rises equal larger deposit requirements, and so on. Unlikely to make you feel up about your chances of getting a property.
But look beyond this: mortgage approvals rising, rates being cut, new lenders in the wings, demand to own a home still strong. It is not quite the sombre picture many have been led to expect.
And here is the issue for advisers: it is about getting the reality of the situation across to clients that their ambitions for owning a property are not out of reach. The market is functioning and, with a few notable exceptions, functioning well.

29 August 2014 | By Devraj Ray
House prices continued to rise in August, with average property prices up 11 per cent year-on-year.
House prices have now risen for 16 months in a row, although the monthly rate of growth dipped between June and July from 11.8 per cent to 10.6 per cent.
The latest Nationwide house price index shows average prices hit £189,306 this month, up from £170,514 a year earlier. On a monthly basis, prices rose 0.8 per cent from £188,949.
Nationwide chief economist Robert Gardner says: “The outlook for the housing market remains highly uncertain. The number of approvals fell by almost 20 per cent between January and May, suggesting that activity was cooling.
“However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the Mortgage Market Review rather than an underlying loss of momentum.”

12 August 2014 | By Devraj Ray
Brokers say data revealing continued growth in approvals shows lenders are beginning to overcome the “teething problems” in the immediate aftermath of the Mortgage Market Review.
Lenders’ service levels dipped considerably in the weeks after the MMR came into effect on 26 April, with some taking up to three weeks to assess an application.
But figures published yesterday show total approvals grew 2 per cent year-on-year in June, from 81,800 to 84,100, although the number of remortgage loans continued to fall, with approvals shrinking 8 per cent annually.
Brokers says the figures indicate lenders are beginning to get to grips with the new regulatory environment.
Chadney Bulgin mortgage partner Jonathan Clark says: “I think what the approvals data shows is that over the last couple of months, those teething problems that we experienced are slowly being overcome. Some lenders really struggled with their own IT systems at first and thankfully that problem seems to be abating.
“From what we’ve seen, borrowers are getting clued up as well and that will all contribute to increasing volumes.”
Coreco director Andrew Montlake adds: “I think we’ve seen the early issues dispensed with. Most lenders seem to be coming to terms with the new regulations and systems so we should hopefully be getting back to business as usual.
“We’ve already seen lenders cutting rates as well so things are certainly looking up.”

28 July 2014 | By Devraj Ray
The housing market showed signs of cooling in June with as prices remaining almost unchanged from the month before.
According to Land Registry figures, the average UK house price reached £172,011 in June, virtually unmoved from £172,029 in May but 6.4 per cent higher than the £161,716 recorded in June 2013.
Prices in London rocketed from £375,942 in June last year to £437,608 last month. But despite the annual rise of 16.4 per cent, prices in the capital also saw no change from £437,072 May.
The North East saw the slowest annual growth in June, with an average price of £98,555 only 0.8 per cent higher than the £97,805 recorded a year earlier. Prices in the North East fell 1 per cent from May.
Yorkshire & Humber saw the steepest monthly fall, with prices dropping 1.3 per cent from £120,226 in May to £118,699 last month.
Capital Economics property economist Matthew Pointon says despite the slow in growth, he does not expect house prices to go through a sustained decline.
Pointon says: “House prices were flat in June, which led to the first drop in the annual rate in a year. That is consistent with other measures indicating a slowdown in the housing market.
“However, the strong economic backdrop rules out a sustained period of house price falls. A growing economy, combined with rising employment and pay growth, which will finally begin to rise in real terms, will all act to support housing demand.”
SPF Private Clients chief executive Mark Harris says: ”The latest Land Registry data points to the slowdown in the market which agents have been seeing over the past few months. Uncertainty surrounding a potential interest rate rise, and the outcome of the general election on the prime market which could result in the introduction of a mansion tax, are all having a cooling effect.
”London is still the leader of the pack, despite the pace of growth slowing.”

The amount of money lent to borrowers reached £17.5bn in June, which is 17% higher than same period last year.
The figures could tip the UK towards a more conservative lending environment, say economists.
The amount of money lent to borrowers to buy properties was at its highest for eight months in June, according to the mortgage lending figures from banks and building societies.
The Council of Mortgage Lenders estimates that gross mortgage lending reached £17.5bn in June. This is 4% higher than May, 17% higher than June last year and the highest monthly figure since October 2013. Gross mortgage lending for the second quarter of this year was up 10% from the first three months of this year, said the CML, and this has increased by 21% from the second quarter of 2013.
However, the impact of new tighter mortgage lending rules and the possibility of a series of interest rate rise could lead to more subdued lending in the months ahead, said the CML. Last month the Bank of England’s Financial Policy Committee announced that banks should check that new borrowers could afford their mortgages if interest rates were to rise by 3% over the first five years of the loan, and that there be a 15% limit on the proportion of new mortgages with loan to income multiples at or above 4.5 times.
CML chief economist Bob Pannell said: “It is difficult to gauge the short-term direction for house purchase activity and mortgage lending more generally, given unknown regulatory impacts, regional differences and uncertainty as to when the first in a series of interest rate increases will take place.”
At present, the proportion of new mortgages where the amount borrowed is at or above 4.5 income been about 11% of the market, said the CML, comfortably below the 15% threshold now proposed. However, some lenders who do not assess affordability using the interest rate rise stress test may be reluctant to change their business models, while others might decide to lend less than 15% of new mortgages to those with high loan to income mortgages.
“Any tightening of affordability metrics is likely to have more pronounced impacts on the London market and first-time buyers more generally,” said Pannell.

9 July 2014 | By Devraj Ray
The average UK house price could rocket to £330,000 by 2020, according to PricewaterhouseCoopers.
Office for National Statistics figures show average prices in the UK reached £260,000 in April, up 9.2 per cent from £238,000 in April last year.
PwC says the rate of growth in the UK market will slow over the next three years, with the average price predicted to reach £276,000 by the end of 2015 and close to £330,000 by 2020.
While the report claims the national housing market is “not yet overheating”, it goes on to say evidence of a bubble is far stronger in London, where it predicts average house prices could rise from £485,000 to £545,000 by 2020.
PwC says fears around a bubble could “cause interest rates to rise sooner rather than later”. The report also says the impact of the Help to Buy mortgage guarantee scheme on house prices has not been significant.
The report concludes by calling for an increase in housing supply, which it says must be a priority to keep prices under control

20 June 2014 | By Steve Tolley
Increasing house prices have seen stamp duty revenue rise by almost £1bn a year.
The Times reports research from Lloyds Bank which show 83 per cent of homeowners now have to pay the levy compared with just 17 per cent in 1998.
Lloyds has calculated the average homeowner in England and Wales would pay nearly £12,000 in stamp duty during a lifetime. Those living in London would have to pay £38,000.
In the year to March the bank says £5.6bn was collected through the tax, up from £4.7bn the previous year.
According to the Office for National Statistics, house prices in London soared 18.7 per cent in the year to April with the average price in the capital hitting £485,000, up from £409,000.
The average UK house price shot up to £260,000 in April, a rise of 9.9 per cent from £238,000 a year earlier.

5 June 2014 | By Devraj Ray
Two-thirds of brokers say they have not seen an increase in buy-to-let lending since the Mortgage Market Review came into effect on 26 April.
Mortgage Strategy’s most recent straw poll asks if brokers have experienced an uplift in buy-to-let business since the MMR came into effect five weeks ago, with some 68 per cent saying they had not yet witnessed an increase.
With the MMR requiring lenders to apply more stringent affordability checks for residential mortgage applicants, industry commentators forecast an increase in buy-to-let business.
Trinity Financial product and communications manager Aaron Strutt says: “I don’t think the figures are too surprising at the moment for a variety of reasons. Firstly, a lot of the lenders are getting wise to buy-to-let gaming and all that comes with it so they will more than likely have extra checks in place to spot if an applicant is going to live in the property.
“You also have to consider that many of the lenders have been MMR-compliant since before 26 April, so that takes away from the likeliness we would see a sharp increase. We may see a more gradual trend over time but I wouldn’t expect to see anything drastic

By Peter Dominiczak and Anita Singh
Mortgage rates are poised to start rising sooner than expected, the outgoing deputy governor of the Bank of England warned yesterday.
Charlie Bean said the base rate would soon start increasing in “baby steps” from its current level of 0.5 per cent to reach 3 per cent by 2017.
Mortgage lenders have started to introduce controls to ration home loans, amid growing fears that the return to “normal” rates will plunge many homeowners into financial difficulty.
Britain’s faster-than-expected economic recovery had led experts to speculate that rates would go up in the first quarter of next year.
However, in an interview with the BBC, Mr Bean indicated that the rises could start earlier.
Higher rates would provide respite to millions of pensioners, who have seen the value of their savings eroded by high inflation and rock-bottom returns.
Mr Bean, who is a member of the Bank’s Monetary Policy Committee, said that rates could settle between 2017 and 2019 at a lower level than the average of 5 per cent seen in the years before the economic crash.
“There’s a case for moving gradually because we won’t be quite certain about the impact of tightening the Bank rate given everything that has happened to the economy,” he said.
“It might not operate in quite the same way as before the crisis. So that’s an argument, if you like, for being a little bit cautious, moving in baby steps to avoid making mistakes.
“But of course if you want to pursue that strategy, you need to start taking those baby steps a bit earlier, otherwise you end up being behind the curve.”
Mr Bean conceded that raising rates too early could affect economic activity.
Lord King, the former governor, said that a “normal rate” of around 5 per cent or 5.5 per cent was “where we ought to be” in a “very long time”.
“We don’t get there by raising rates now, because that will generate a further recession now,” he said.
He added: “I have no idea what will actually happen but I think the factors that drive it will be primarily political.”

Lloyds limits mortgage to four times your salary: Britain’s biggest lender caps loans over £500,000
Britain’s biggest mortgage lender announced a major clampdown on huge home loans yesterday.
The move from Lloyds comes amid fears that the market in the South-East is spiralling out of control – with London prices rising up to 21 times faster than those in other parts of the UK.
Lloyds Banking Group, which controls around a quarter of the country’s mortgage market, has now banned all loans of more than £500,000 with immediate effect – unless the mortgage offer is less than four times the household’s income.
The cap will apply to Lloyds subsidiaries Halifax, Bank of Scotland and Scottish Widows Bank as well.
Traditionally, couples were only ever allowed to borrow three or four times their joint salaries for a mortgage. However, in the years preceding the financial crisis of 2008, it was not uncommon for lenders to offer loans up to six times their wages.
The demand for mega-mortgages, driven by soaring house prices in London and the South, often resulted in buyers being offered mortgages they could barely afford.
The new rules from Lloyds mean borrowers will need a single or combined salary of £125,000 in order to take out a mortgage for £500,000. More than a quarter of homes in London now cost this much or more.
By the end of next year, the average home in the capital is expected to cost £560,000. A couple with a 10 per cent deposit of £56,000 would need a combined salary of £126,000 to secure a mortgage from Lloyds.
All lenders now use a complicated ‘affordability’ calculation to decide whether to offer a mortgage. Lloyds will continue to use these stress tests – but will also impose the salary cap for deals over half a million.