Marketing No Comments

Green shoots of recovery appear in the mortgage market

Confidence in the mortgage market is showing healthy signs of recovery following the disruption of the mini-budget in September 2022, judging by the latest mortgage market tracker report from the Intermediary Mortgage Lenders Association (IMLA).

The average number of Decisions in Principle (DIPs) that intermediaries processed in Q4 fell slightly by two when compared to Q3 2022, reaching the level seen two years ago in the final quarter of 2020. Despite a drop in November (to 23 per intermediary), December saw a rebound, rising back up to 26 and matching the levels seen in July and August of 2022.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

In Q4, the conversions of DIPs to completions also fell very slightly by 1% from Q3 2022, down to 37%. The business area and region seeing the biggest drop in conversions were in directly authorised DIPs and brokers operating out of the South of England, seeing falls of 11% and 6% respectively during Q4. Conversions for first-time buyers and buy-to-lets also remained steady with slight falls of 3% and 2%, reflecting a strong mortgage pipeline in the face of the macro-economic challenges now facing FTBs and some BTL landlords.

The dent in confidence caused by the mini-budget and resultant market volatility was evident in the data, with 29% of intermediaries reporting in Q4 2022 that they were ‘not very confident’ about the outlook for the mortgage industry, rising from just 4% during the same time period in the previous year. However, the most prominent dip in confidence for Q4 was during October, with November and December showing signs of stabilisation – returning to a 70% proportion of intermediaries who felt either ‘fairly confident’ (56%) or ‘very confident’ (14%) in December.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Comparatively, intermediary confidence in their own business declined only slightly. In Q4, 11% of intermediaries reported being ‘not very confident’ in the outlook for their business, rising from the 5% reporting the same in the previous quarter. However, overall, 87% of intermediaries still reported that they were either ‘very confident’ or ‘fairly confident’ in their own business outlook during the final quarter of 2022 – a dip of only 7% from Q3 despite the October disruption and rising interest rates.

Kate Davies, executive director of the IMLA, commented: “There are green shoots here, with December marking a noticeable increase in confidence compared to October. The Bank of England’s continuing action to bring inflation under control, combined with strong competition amongst lenders to attract new business, are good indicators of recovery.”

By Jerome Smail

Source: Property Industry Eye

Marketing No Comments

Mortgage lending expected to surge to record £316bn in 2021

Mortgage lending is expected to top £316bn by the end of 2021 after house sales rose to their highest level since the financial crash.

In the UK gross mortgage lending is expected to peak this year at £316bn, up 31 per cent on 2020 as it receives a boost from the UK stamp duty holiday. Next year lending is expected to moderate to £281bn before increasing to £313bn in 2023, according to new data from UK Finance.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

James Tatch, Principal, Data and Research at UK Finance, said, “2021 has been a bumper year for mortgage lending amid the stamp duty holiday and homeworkers moving from cities. The outlook for the housing and mortgage markets over the next two years is for a return to more stable, balanced picture following the upheavals of the last two years.”

Total house purchase transactions are expected to reach 1.5m in 2021, some 47 per cent higher than 2020 and the highest number since before the Global Financial Crisis. Buy-to-let activity has followed a similar trend to the residential sector, with purchase activity increasing to £18bn, up 83 per cent on 2020.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

While housing market will inevitably soften in 2022 as the demand stimulus from the stamp duty holiday will no longer be a factor boosting house purchases other Covid-19-triggered behavioural changes could provide continued impetus according to the report which predicted a resurgence in homemover numbers following a decade of stagnation.

By LILY RUSSELL-JONES

Source: City AM

Discover our Commercial Mortgage Broker services.

Marketing No Comments

Value of new mortgage commitments reach highest level since 2007

The value of new mortgage commitments was up 24.2% annually to reach £87.7bn, and is at the highest level since 2007 according to the Financial Conduct Authority (FCA).

The quarterly mortgage lending statistics data also shows that the outstanding value of all residential mortgage loans was £1,541.4bn at the end of Q4 2020, 2.9% higher than a year earlier.

The value of gross mortgage advances in Q4 2020 was £76.6bn, 4.2% higher than in Q4 2019.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Since the beginning of 2007, am estimated 340 regulated mortgage lenders and administrators have been required to submit a Mortgage Lending and Administration Return (MLAR) each quarter, providing data on their mortgage lending activities.

The FCA and the Prudential Regulatory Authority (PRA) both have responsibility for the regulation of mortgage lenders and administrators so this data publication is joint.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “The highest volume of mortgage commitments since 2007 has been fuelled by the stamp duty holiday.

Discover our Residential Mortgage Broker services.

“It not only means that brokers will have a very healthy pipeline of business throughout the start of this year but also there is plenty of momentum in the market.

“The stamp duty holiday extension until the end of June should help to maintain high volumes but brokers need to be mindful of the time it takes for offers to complete. New buyers or movers need to have contingency plans in case they miss the June deadline and are faced with a tax bill.

“The huge numbers in Q4 have been fuelled mainly by movers and first time buyers but there is still a large market out there for remortgage business.”

By Jake Carter

Source: Mortgage Introducer

Discover our Mortgage Broker services.

Marketing No Comments

UK mortgage approvals reach highest level since 2007

The number of mortgage approvals reached their highest level since 2007 last year as buyers took advantage of the stamp duty holiday.

The housing market remained resilient in the face of volatility and essential closure of the market during the first lockdown.

There were 818,500 mortgage approvals over 2020, up from 789,100 the previous year, according to Bank of England data released today.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

There was a significant uptick in lending in the second half of the year after a record low of 9,400 approvals in May. Borrowers rushed to take advantage of the stamp duty holiday introduced over the summer.

Although approvals fell back to 103,400 in December, down from 105,300 in November, it was still the highest level since August 2007.

Former RICS residential chairman Jeremy Leaf is not complacent: “While these figures are always a good indicator of direction of travel for the market, we won’t be getting carried away, not least because the year’s lower for these approvals appeared a couple of months after the first lockdown.”

Discover our Residential Mortgage Broker services.

Additionally this level of momentum is unlikely to be sustained as the stamp duty holiday winds down at the end of next month.

Samuel Tombs, Pantheon’s chief UK economist predicts the vaccine rollout will also mean “people will be content again with their pre-pandemic housing choices by the summer.”

The BoE’s data also showed that consumers paid down a record £16.6bn in debt last year as spending options became limited during lockdown.

“An overall reduction in consumer debt, combined with high levels of cash savings, and pent up demand for holidays, meals out and other leisure activities, could prove to be an explosive powder keg that will help drive the economy when it finally opens up again,” AJ Bell financial analyst Laith Khalaf says.

By Angharad Carrick

Source: City AM

Discover our Mortgage Broker services.

Marketing No Comments

Bank of England: Loan values rise by 2.9% annually in Q3

Despite a decreasing share of high loan-to-value (LTV) borrowing, mortgage lending remained strong in Q3 with the outstanding value of residential loans up 2.9% compared to a year earlier.

The Bank of England’s (BoE) latest quarterly mortgage lending data revealed there were £1,527.3 billion of mortgages outstanding at the end of Q3.

Meanwhile the value of new mortgage commitments – which is lending which has been agreed to be advanced in coming months – went up by 6.8% when compared to the same quarter in 2019. It reached £78.9 billion, according to the BoE, which is the highest level since 2007.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

The value of gross mortgage advances during the quarter was down 14.7% on Q3 2019 at £62.5 billion.

What’s more the proportion of mortgages advanced during the quarter with LTVs of 90% or more were 3.5% which is 2.4 percentage points lower than a year ago.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “This is no real surprise with many lenders pulling back from this market, and it is only just starting to recover, which is good news for first-time buyers in particular.”

Commenting on the rest of the data he added: “The Bank of England figures show a strong lending market, as we have seen on the ground, with new commitments for the coming months some 6.8% higher than a year earlier.

“There is plenty of business in the pipeline which is working its way through as buyers try to take advantage of the stamp duty holiday. As long as they use good advisers – a mortgage broker and a switched-on solicitor – this should be possible, despite some scaremongering that they are already too late.”

Discover our Residential Mortgage Broker services.

A ‘precarious’ market

But Karen Noye, mortgage expert at Quilter, thought today’s data painted a ‘precarious’ picture of the housing market at the moment.

“The market is clearly burning bright thanks to the fuel poured on it as a result of stamp duty cut but whether the fire can keep blazing is yet to be seen,” she said.

“The continued increase in house prices is likely to be unsustainable and if the stamp duty holiday is dropped in March and significant economic headwinds as a result of the pandemic start to bite, we may see a very different picture with borrowing and lending being significantly curtailed.”

Noye thought the fact the value of new commitments had increased by as much as 6.8% was ‘worrying’ and ‘should ring alarm bells’.

“While it would be foolish to draw comparisons between the mortgage market now and the one back when the financial crash hit in 2008, we are dealing with unchartered waters and it is worth proceeding with caution,” she said.

By Kate Saines

Source: Mortgage Finance Gazette

Discover our Mortgage Broker services.

Marketing No Comments

Struggling to get a mortgage? Try a broker… or a small lender

It’s mayhem in the mortgage market at the moment due to a paperwork backlog at banks and pent-up demand from the lockdown.

Lenders are making changes to their home loan deals with little or no notice to limit the amount of business they take on.

So that cheap rate you were eyeing up could quite easily be gone tomorrow. Or the terms and conditions may change suddenly, meaning you no longer qualify for a loan you thought had been secured.

Here are four other places to turn if you are caught up in the chaos…

SMALLER LENDERS

Lee Hockins, from Summit Wealth financial advisers, says: ‘It’s virtually impossible at the moment to get a mortgage at 95 per cent loan to value and there are only a small number of lenders offering 90 per cent mortgages – and none of the big ones.’

Lloyds, NatWest, Barclays, Santander, TSB and most recently HSBC have all pulled out of the market for mortgages with a deposit of 10 per cent or less, hammering first-time buyers.

The good news is that smaller regional building societies may be able to help.

Many still assess applications manually, unlike big banks which often use automated underwriting technology which can result in a computer-generated rejection.

Having your application assessed by an individual means your specific circumstances can be taken into account. Try the Buckinghamshire, the Penrith and Stafford Railway.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

BANK OF MUM AND DAD

Popular mortgage deals that allow parents to help their offspring on to the ladder are being cut back too.

But the Bank of Mum and Dad isn’t entirely closed.

After Lloyds shut its Lend a Hand mortgage to new applicants, the main mortgage designed for parental help is Barclays’ Family Springboard deal.

This allows a family member or friend to put at least 10 per cent of the purchase price in a savings account with the bank in place of a deposit.

Ray Boulger, of mortgage brokerage John Charcol, says: ‘The Barclays Springboard mortgage is the best of the deals for people who are getting help. It’s really good value for first-time buyers with either a small or no deposit, who has someone who wants to help but also wants to keep control of their funds.’

Tipton & Coseley Building Society has launched a Family Assist mortgage offering up to 100 per cent loan-to-value mortgages for buyers, so long as a relative has a 20 per cent charge on their own property or puts 20 per cent of the amount borrowed into a savings account.

But some are limiting the amount of outside help allowed. Nationwide recently changed the criteria for gifted deposits, so borrowers who want a 90 per cent loan-to-value mortgage can only be given 25 per cent of the deposit, meaning they have to provide the rest themselves.

A BROKER ON YOUR SIDE

With banks launching and ditching mortgage deals on an almost daily basis, a broker can really prove their worth.

Not only do they often get tipped off in advance when a deal is about to be pulled, they are clued up on the specific criteria that each lender will look for in your mortgage application – and can stop you wasting time. Brokers will also have a good idea how stretched a bank’s mortgage department will be, helping you avoid disappointment when demand is high.

TRY A LIFETIME MORTGAGE

For the over-55s who are retired or approaching retirement, an alternative option is a so-called retirement interest-only mortgage. Boulger says: ‘With these deals, the eventual sale of the property can be used as the repayment strategy.

‘So lenders assess whether you can afford the loan on the cost of paying the interest only in retirement, as opposed to a repayment deal where you have to pay back some of the capital each month.

‘The downside is that if it’s a joint application, lenders have to decide whether, after one partner dies, the surviving partner would be able to support the mortgage from the remaining income.’

Lenders offering this type of mortgage include Nationwide, Leeds, Bath, Ipswich, Loughborough and Tipton building societies.

…OR LET THE CHAOS PLAY OUT

  • Mortgage rates are expected to remain at current levels for some time – but house prices may not.
  • Many experts believe that while prices are heading up at the moment, there could be a fall back when the stamp duty holiday ends in March next year.
  • Remember, if you are buying and selling at the same time, then a fall in the market is likely to impact both ends of the deal.
  • So you may be no worse off if you wait – and find it easier to borrow the amount you need for your next mortgage.

By Sarah Bridge, The Mail on Sunday

Marketing No Comments

Strong mortgage lending in first quarter of the year

The first three months of 2020 saw a rise in mortgage lending before the coronavirus lockdown took hold.

Gross mortgage advances in the first quarter of 2020 totalled £65.8 billion, 3.8% higher than in Q1 2019, the latest figures from the Bank of England show.

This takes the outstanding value of all residential mortgages loans to £1,509 billion at the end of March 2020, which is a rise of 3.9% from a year earlier

The value of new mortgage lending agreed to be advanced in the coming months was 6.1% higher than the previous year, at £67.6 billion.

Almost three quarters (73.2%) of the share of gross advances had interest rates of less than 2% above Bank Rate in Q1 2020. This is 10.2% lower than a year ago and was driven by the 65bp cut in Bank Rate in March rather than any significant change in mortgage interest rates.

The share of mortgages advanced in Q1 2020 with loan-to-value ratios exceeding 90% was 5.2%,up by 0.7% from a year ago.

Buy-to-let lending, including house purchase, remortgage and further advance, represents a 14% share of gross mortgage lending, unchanged from Q1 2019.The value of outstanding balances with some arrears increased by 1.8% over the quarter to £13.7 billion, and now accounts for 0.91% of outstanding mortgage balances.

Commenting on the figures, Mark Harris said: “The Bank of England data relates to the first quarter of the year when the impact of Covid-19 had not yet been felt.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

“While this makes it feel very historic, it does show what might have been had the pandemic not hit, with an increase in gross mortgage advances compared with the previous year, as well as the value of new mortgage commitments.

High LTV

Harris continued: “The share of mortgages advanced to borrowers requiring a loan-to-value greater than 90% was 5.2%, an increase on the previous year, illustrating the level of demand for high LTV deals.

“With lenders including Accord, Clydesdale and Virgin Money pulling out of the 90% LTV market this week owing to high demand, after only recently returning when physical valuations were once again allowed, there is clearly a need for the big lenders to commit to this market.

“The number of people taking out high LTV mortgages in the second quarter is likely to fall considerably, not due to lack of demand but lack of products available.

A spokesperson for Virgin Money commented: “We’ve been one of only a few lenders offering 10% deposit products, however we have seen strong increases in demand from customers with small deposits.

“To protect the service for existing customers as well as pipeline applications, we are temporarily withdrawing our 90% LTV products. These products will still be available for existing customers looking to do a product switch. This change means we can continue to focus on providing existing customers with the level of service they’ve come to expect.

Buy-to-let

Referring to the buy-to-let figures, Harris said: “Encouragingly, buy-to-let lending was stable, even though the sector has come in for a lot of change on the tax and regulatory front. Investors are adapting to the new environment and tailoring their portfolios accordingly.

“The impact of tenants unable to pay their rent is providing a further challenge for landlords, although of course this won’t be apparent until the second quarter figures.’

By Joanne Atkin

Source: Mortgage Finance Gazette

Marketing No Comments

Masthaven: Three quarters of brokers confident of mortgage market prospects

Almost three quarters (71%) of intermediaries remain confident in the mortgage market’s prospects for the next 12 months, despite the ongoing coronavirus crisis, research from Masthaven Bank has found.

In a survey of more than 200 intermediaries conducted in May some 65% said they were confident whilst 6% said they were very confident – a quarter said they were unsure.

Only 3% of intermediaries surveyed said they were not confident in the market’s prospects for the coming year.

Rob Barnard, director of intermediaries at Masthaven Bank, said: “Broker confidence is holding up well and that’s such an important part of the market, as it directly feeds through into the conversations intermediaries are having with customers.

“Now that the housing market has reopened and with the news that mortgage payment relief may be extended to help those customers in need, it’s good to see positive sentiment for the next twelve months from the intermediary community.”

The survey also found that more than half (51%) of specialist lending intermediaries are now using video calls to liaise with their customers, while 42% are sending regular email updates.

A small proportion of brokers have introduced live chat platforms on their websites (4%) or extended their opening hours (2%) since the start of the pandemic.

Nearly a third (32%) of specialist lending intermediaries said that they are recommending lenders based on their access to reliable funding.

Jon Hall, chief commercial officer and deputy CEO at Masthaven Bank, said: “Masthaven has remained open for business throughout the crisis.

“We have continued to work with intermediary partners to ensure they have access to a good range of competitive products.

“We have adapted our service offerings, launching a fee-free remortgage range in response to broker demand and increased our use of AVMs where physical valuations have not been possible. Our offices may be closed but we remain open for business.”

By Ryan Fowler

Source: Mortgage Introducer

Marketing No Comments

Lenders return in week after lockdown

Lenders have reintroduced physical valuations and higher loan-to-value lending after the government gave the green light to restart the housing market in England last week after seven weeks of lockdown.

Accord Mortgages announced today (May 20) that it is accepting residential applications up to 90 per cent LTV following the renewal of physical valuations.

Buy-to-let remortgages are currently available up to 65 per cent LTV, although a spokesperson for Accord said an announcement on this was due on Friday.

Meanwhile, Virgin Money and Clydesdale Bank confirmed “a wider range of products supported with a mix of physical and non-physical valuations” would be introduced next week, including residential mortgages up to 90 per cent LTV and buy-to-let mortgages up to 80 per cent LTV.

Temporary limits on loan sizes and property values will also be withdrawn.

Additionally, physical valuations will be booked in England for pipelines cases with Virgin Money and Clydesdale Bank that require such a valuation.

Some lenders had already resumed offering high LTVs last month. Halifax Intermediaries reintroduced lending up to 85 per cent LTV in April, followed by BM Solutions’ return to buy-to-let lending up to 75 per cent.

Nationwide also extended lending via brokers up to 85 per cent LTV after focussing support on existing borrowers and processing ongoing applications.

Providers had previously withdrawn high LTV lending after the government announced a lockdown on March 23, which effectively brought the property market to a halt.

Additionally, Nationwide has confirmed that valuers will be able to resume physical inspections this week (from May 18) after the government published its new guidance on moving home.

Likewise, Santander announced the following day (May 19) its valuation partners would aim to contact intermediaries’ clients, or the property owner, by May 29 to arrange a date for cases in England that required a physical inspection and had been put on hold.

It anticipated that most valuations will be carried out before June 10.

Santander said it would be holding rates while increasing the maximum loan size to £1m on some residential products, and to £750,000 on its buy-to-let range.

This followed recent changes from Santander such as raising the maximum LTV for residential lending to 85 per cent, and for buy-to-let remortgage products to 60 per cent LTV.

Meanwhile Leeds Building Society is working with Countrywide to complete the “outstanding minority” of valuations on mortgage applications as physical inspections resume in England.

Jaedon Green, chief customer officer at Leeds Building Society, said desktop valuations will continue to be used where appropriate and “for homeowners particularly concerned about social distancing, we’re also piloting external inspections which mean a valuer will still visit their home but doesn’t need to enter it”.

Specialist lenders have also been adapting to market conditions. As well as resuming physical valuations, on May 19 West One Loans relaunched buy-to-let products at 70 per cent LTV, subject to a maximum loan size of £250,000.

For many brokers the renewal of physical valuations is likely to be welcome news.

Andrew Brown, managing director at Bennison Brown, said the main challenge during lockdown was that an estimated 60 per cent of their cases were not suitable for remote valuation.

Commenting on the return of physical valuations and viewings, Mr Brown said: “It is likely to take some time to clear the backlogs and for consumers to gain confidence but it is the first major piece of good news we’ve had for some time.

“We hope this is the start of the recovery of our sector.”

Some advisers had pointed to issues with undervaluations as remote valuations were carried out during lockdown.

Kevin Dunn, director at Furnley House, said some of his remortgage clients, who had properties valued remotely, felt they would have received a higher figure if a physical valuation had been carried out.

By Chloe Cheung

Source: FT Adviser

Marketing No Comments

Government to extend mortgage payment holidays

Mortgage payment holidays are likely to be extended past June, according to a report in the Financial Times.

Chancellor Rishi Sunak is said to be in discussions with the banking sector about an extension.

Salman Haqqi, personal finance expert at money.co.uk, said “The government’s initial launch of mortgage holidays brought welcome relief for homeowners who had their income affected by the COVID-19 crisis.

“The scheme, where payment could be deferred with zero negative impact to credit ratings, resulted in up to one in nine homeowners making use of the initiative.

“Though a formal announcement is yet to be made, many businesses are still closed and the full extent of job losses is still becoming clear, so any extension to the scheme will be welcomed.”

As it stands more than 1.6 million mortgage customers have taken a payment holiday.

The government’s furlough scheme has already been extended until the end of October.

Haqqi added: “Should homeowners wish to look into a payment holiday on their mortgage, it’s important to remember that you will still owe the money and interest will continue to accrue while the deferred payments remain unpaid.

“This means that your monthly payments will likely go up slightly after the payment holiday ends.

“While the option to take a payment holiday on mortgages will have been a lifeline for many, if you are still able to make your payments in full, you should continue to do so.”

BY RYAN BEMBRIDGE

Source: Property Wire