Mortgage Broker Manchester

14 May 2014 | By Bob Hunt, Chief Executive, Paradigm
So here we are – Mortgage Market Review day on 26 April has been and gone and the earth did not spin off its access nor did mortgage systems collapse under the weight of all the changes they had to endure.
In fact, given it was a Saturday, MMR appeared to pass off without incident.
However the next few weeks and, I suspect, months will see a bedding in period and certainly at a bank branch level, prospective borrowers who have previously been able to see an “adviser”, go through the detail and gain a mortgage approval in the time it takes to drink a coffee and read the sports pages are going to be left somewhat shocked by the increased time such a process is going to take.
At our recent mortgage and protection round table a lender representative told the audience that they expected the time it takes to see a branch adviser to rise from half an hour to two-and-a-half hours. The FCA recently said in these very pages that it is comfortable with individuals undergoing three-hour meetings with “advisers” post-MMR.
But the big question is will borrowers themselves be happy with this? Might they instead prefer to seek the services of a mortgage broker that can not only source the whole market but has been collecting the type of information now required of branch advisers for many years. This should certainly be the message going out from the advisory community in the months ahead but you will need to ensure potential clients are aware of your services over the option of going direct.

Despite the mortgage slowdown, average prices in England and Wales went up £1,200 in April, setting a new record according to the latest LSL Property Services monthly index.
The average property value is now £263,113 climbing £54,000 – or 26 per cent – above the recession rock bottom of April 2009 when the nation was gripped in the gloomy depths of the financial crisis.
It also means house prices have grown by 7.3 per cent in just a year.
House prices: LSL Property Services show that property values have soared in the last 12 months
Total house sales stand 40 per cent higher than at the same point last year, totalling 72,000 in April.
LSL says activity is largely being fuelled by increasing numbers of purchases by first-time buyers and buy-to-let landlords, as consumer confidence sweeps the country.
David Newnes, director of Reeds Rains and Your Move estate agents, owned by LSL Property Services, said: ‘Low inflation and healthy wage growth are energising household finances, and infusing aspiring buyers with greater optimism.
‘But supply levels need to keep pace, thus allowing the wheels of the housing market to continue turning. Constrained supply in the capital has already moderated total London sales over the past twelve months.
‘Demand shows no sign of slowing. More house building is imperative to keep the momentum going and to ensure that price rises are sustainable, in particular for first-time buyers – who remain the key ingredient at the lower end of the market, oiling the cogs of growth.’

8 May 2014 | By Steve Tolley
The average number of houses being sold per chartered surveyor is at its highest since Feburary 2008 despite a continuing fall in the number of properties coming onto the market, according to the Royal Institution of Chartered Surveyors (RICS).
In the latest quarterly residential market survey carried out by RICS, 26 per cent of surveyors reported an increase in agreed sales. On average each surveyor was involved in 23 successful sales.
However, the survey also found that the number of properties coming onto the market has fallen for the fourth month in a row.
Coming just days after former Chancellor Lord Lawson called on the Government to lower the Help to Buy cap to effectively exclude London from the scheme, RICS says “there does now appear to be a broadening out of the recovery away from the capital”.
Almost two-thirds of chartered surveyors in the North West and 57 per cent of surveyors in East Anglia said they expect prices to continue to rise. In London less than half said they expect to see continuing price rises, down from 61 per cent in March.

Gross lending was up an estimated 43 per cent year-on-year in February, according to new figures released today by the Council of Mortgage Lenders.
Lending was at its highest February total since 2008 with £15.2bn advanced, up significantly on the £10.6bn advanced in the same month last year.
However, lending was down 6 per cent on a monthly basis, falling from £16.1bn in January.
CML chief economist Bob Pannell says: “Housing market indicators have continued to be strong over recent months, once seasonal factors have been taken into account.
“First-time buyers have benefited most from the government’s Help to Buy initiatives, with the more recent mortgage guarantee scheme now starting to push typical loan-to-value levels higher.
“The housing market got a further boost from this week’s Budget. This, together with benign developments in the economy more widely, should bolster short-term sentiment and activity.”
Legal & General Mortgage Club director of mortgage club and housing Stephen Smith believes lending can continue growing despite the introduction of the Mortgage Market Review next month.
He says: “These figures from the CML show that the mortgage market is returning to a healthier level of lending. With Help to Buy 1 now being extended until 2020, it is likely that the upward trend in mortgage lending seen recently will continue despite the introduction of the MMR.
”However, there are still some major obstacles for those looking to get on the housing ladder or move from their current home. House prices in certain parts of the country continue to rise far faster than the rate of wage inflation making them simply unaffordable for many.
”The government’s initiatives to build more homes, announced in yesterday’s budget, will go some way to help keep the market fluid and ensure demand doesn’t continue to outstrip supply. Despite this, we still need to see much more stimulus to house building.”

The number of completions through the Help to Buy equity loan scheme rocketed in the last quarter of 2013 after official figures revealed that more people completed in that period than in the first six months of the scheme.

Between the scheme’s launch, in April, and the end of December last year, there had been 12,875 completions through the scheme. At the end of September, 5,375 sales had completed under the scheme, meaning some 7,500 people completed under the scheme in the final three months of 2013.
Figures released by the Department for Communities and Local Government today show there are also 6,446 “scheduled-out” sales, which are potential completions where the borrower has reserved a property by the Government has not yet advanced the equity loan.
The top five local authorities by completions in the first nine months of the scheme were Leeds, Wiltshire unitary authority, Central Bedfordshire unitary authority, Milton Keynes unitary authority and Manchester with 230, 224, 197, 195 and 169 completions respectively.
Earlier this month, Prime Minister David Cameron revealed that over 6,000 people had applied for a mortgage through the Help to Buy mortgage guarantee scheme, which is commonly known as Help to Buy 2. Help to Buy was the flagship policy of last year’s Budget and aims to boost the availability of 95% loan to value mortgages.
The scheme works in two parts; the first part came into effect in April as a shared equity scheme for new build homes. The second part, a £130bn mortgage indemnity scheme, which was first revealed by Mortgage Strategy in February, came into force in November for all properties worth up to £600,000.
Last week, the Bank of England was forced to deny it wanted the Treasury to lower the maximum loan available through the scheme after BBC business editor Robert Peston claimed it wanted it scaled back to under £400,000.

UK inflation dropped down to its 2% target at the end of 2013, according to the latest official figures. The Office of National Statistics says the consumer prices index rose by 2% in the year to December.
This latest figure is marginally lower than the 2.1% recorded for November 2013.
The fall to 2%, the Bank of England’s target for inflation, also marks the lowest level of inflation seen in the UK since November 2009. The fall in inflation is largely attributed to food prices as well as recreational goods and services, offset by upward contributions from motor fuels. 
IHS Global Insight chief UK and European economist Howard Archer says: “It is possible that consumer prices inflation could periodically dip below 2%. The overall increase in oil and gas prices will now be less than occurred a year ago, due to the government easing some of the green burdens on the ‘big six’ energy companies.”
Inflation as measured by the retail prices index, which is no longer a national statistic, rose to 2.7% from 2.6% in November.

Gross lending rocketed 30% year-on-year in November, according to figures published today by the Council of Mortgage Lenders. There was an estimated £17bn of gross mortgage lending in November, compared with the £13bn lent in November last year. Lending dipped 4% from the £17.6bn lent in October.
Earlier this month, the CML estimated gross lending would hit £170bn by year-end. This is significantly up on the £156bn it forecast for 2013 a year ago. The trade body has predicted gross lending of £195bn next year.
Despite the massive improvement, CML chief economist Bob Pannell says lending is unlikely to go much further beyond £200bn over the next few years due to the new rules being implemented through the Mortgage Market Review.
He says: “New rules hardwire in a more risk-averse lending environment for the future and so, while we expect lending to rise in line with better economic conditions, the next two years are unlikely to see lending levels getting very far above £200bn a year.”
Moneysprite director Ashley Brown says: “It feels like a booming market but we are still way below the historical norm. That’s how bad things got. Lending conditions do look set to get slightly tougher during 2014, and rates will only be going one way, which will act as a natural check on overall loan numbers. But sensible lending conditions are no bad thing and are essential if we want a long-term, sustainable market.”

Mortgage lenders advanced more money in the third quarter than they have in any other quarter for five years, according to figures released today by the FCA. Gross advances of £49.5bn were recorded in Q3 2013 – the highest total since Q3 2008 – up 25% on the £41.6bn advanced in the same period last year.
The value of residential loan amounts outstanding rose 0.3% between Q2 and Q3, reaching £1.2bn – a jump of 0.5% from the same time period last year. Net lending was up 29% year-on-year in the third quarter, from £5.1bn in Q3 2012 to £7.2bn in the third quarter of this year.
First-time buyers accounted for a fifth of gross advances in Q3, with a total of £9.9bn advanced, while buy-to-let customers borrowed a total of £5.9bn or 12% of gross advances. The figures show just 0.45% – £2.2bn – of gross lending was advanced to borrowers with a deposit of five per cent, compared with 0.41% in Q3 2012.
Capital Economics chief property economist Ed Stansfield says: ”Six months after the launch of Help to Buy, detailed mortgage lending statistics show little evidence of a rise in the share of new mortgages being advanced on the basis of a 5% deposit.”
The volume of new repossession cases in the third quarter of 2013 dropped 14% in a year to 7,349. New arrears cases also fell in both volume and value in the third quarter this year.
The number of new arrears cases dropped 7.9% to 29,900 – the lowest level since the FCA began recording figures in 2007. The value of new arrears cases fell 18% from Q3 2012 to £56m. The percentage of total loans outstanding currently in arrears dropped to 1.97% in the third quarter, compared with 2.06 in Q2.

Nationwide’s November house price index shows property values are up 0.6% on October but annually have now risen 6.5%. The price of an average property now stands at £174,566, up from £163,853 a year ago.
Nationwide’s chief economist Robert Gardner says the pace of change annually is the strongest it has been since July 2010, though prices are still 6% below their peak in 2007. The number of mortgage approvals for house purchase reached 66,735 in September, 34% higher than the same period of 2012.
He says: “Activity in the housing market has picked up strongly in recent months. The number of mortgage approvals for house purchase reached 66,735 in September, 34% higher than the same period of 2012. A large part of the improvement can be attributed to further improvements in the labour market and the brighter economic outlook, which has helped to bolster sentiment amongst potential buyers.”

Knight Frank is predicting that house prices will increase by 24% in the next five years. In its UK housing market forecast for Q4 2013, published today, Knight Frank is predicting house price growth of 7% both this year and again in 2014. It predicts price growth will slow to 4% in 2015 and 3% in both 2017 and 2018.
The forecast follows Savills, the estate agents, which predicts house prices will rise by 25% over the next five years.
Knight Frank expects prime central London to see a slower growth rate of 20% over five years with 6.5% this year and 4% next year. It predicts the market will stall in 2015 when there will be no increase in prime central London before picking up to 5% growth in 2016, 2017 and 2018.
The property firm expects outer London to grow more strongly than prime central London as market dynamics change. The report says “modest” improvement in homebuilding will not have any impact on pricing in the next few years as under-supply continues. The study expects price growth to slow as the Help to Buy schemes come to an end in 2016 but predicts a stronger economy will be able to cope with a stimulus-free housing market.
Knight Frank global head of residential research Liam Bailey says: “For the first time in five years we can be broadly positive about the UK housing market.
 Price growth is encouraging transactions, contributing to labour mobility, and first-time buyers are able to access the market in a way they could not even 12 months ago. Importantly these improvements are not limited to London, they are spreading. There is however a flip-side to these improvements. Rising prices in the short term will limit longer term growth. The fact remains that pricing in the UK is high in historic terms, and while the Government can encourage activity over the next two to three years, it can not change the fundamentals surrounding market affordability, especially as low interest rates and Government interventions start to unwind.”