Post MMR Market Slowdown?

We have written quite a bit about the Mortgage Market Review (MMR) over the past few months. It’s a market-changing set of guidelines from the Financial Conduct Authority, and one of its biggest changes is in the way mortgages are allowed to be sold.

Mortgages must be advised, and with that affordability needs to be taken into consideration. David wrote that this has not affected the time it takes us, because we always take affordability into account.

For the wider market, though, it looks like the MMR is a probable cause for some slow-down in growth.

A recent article in the Financial Times attributes the tighter rules to “discounts” – where homes are sold for less than the asking price. The number of discounts rose in July from June, and a number of commentators are expecting a slow in the recent house-price rise.

The FT article, for example quotes Savills’ residential research director Lucian Cook:

“The heat is coming out of the market in response to prospective interest rate rises and limits on mortgage borrowing. We expect much lower price growth over the next four years, particularly in London and the south of the country.”

Posted in Market Watch, Mortgages

MMR Affordability – No Delays Here

My colleagues have blogged about the MMR (Mortgage Market Review) over the past few months. To summarise:

  • The Financial Conduct Authority published new financial guidelines for mortgage lenders.
  • The guidelines in the MMR require advisers to collect more information than they had generally been gathering – particularly around income and affordability.
  • Buyers started to see delays, because they have to produce an advised sale rather than giving the clients options and asking them to select what they thought was the best deal.
  • Some industry commentators are noticing a slow-down in the pace of growth across the market (and look at the MMR as a contributing factor.)

So, that’s all bad news, right?

Well, not entirely – especially for independent financial services (like us). We have found people starting to use our services to make sure they find a mortgage they can afford instead of going to in-branch advisors, who are seeing delays.

Also, we have not slowed down at all because we have always both provided advice and taken affordability into account.

So, if you are not sure whether your mortgage application could be delayed, why not get in touch? We can help you find an affordable product and provide mortgage advice without delay.

Posted in First Time Buyers, Market Watch, Mortgages

Intermediary Lenders Compete for Brokers’ Attention

Competition is great for the mortgage market: it keeps lenders creative and creates more choice for borrowers.

We’ve talked before about how competition can keep rates low, even when buyers borrow more of the value of their houses. We’ve also discussed how lenders compete to win customers on their fixed-rate mortgage products.

It’s easy to see this competition, because the rates are advertised and promoted to the general public.

But, there is a whole category of lender which most people don’t know about: intermediary lenders. These lenders don’t directly supply mortgages to buyers, they offer their products through brokers and independent financial services (like us). And, their competition is just as real, as they offer incentives and cut rates. The only difference is that their audience isn’t the borrower – at least, not directly. They’re competing for the attention of the mortgage brokers.

For example, have a look at Accord Mortgages, who have recently cut their rates by up to 0.25% on a range of their products. They’re also offering some cash incentives, and a free valuation. Just like any other player in the market, they are out to win more business.

Here at Limetree we look at the whole market of available mortgages, and find the best product to suit our our client’s individual needs. So, intermediary lenders are another string to our bow, and we pay attention to the rates.

If you’re looking to buy property, or looking for a better mortgage deal, give us a call. We have access to a huge range of mortgage products.

Posted in Market Watch, Mortgages

Mortgage Figures Up, but Pace of Growth Slows

Mortgage lending figures for June have been in the news recently, as they creep up to an eight-month high.

The real story, though is that the pace of growth is slowing down. The headlines come from estimates recently released by the Council for Mortgage Lenders (CML). Essentially, yes, there has been real growth, but changes to market regulation mean that further forecasts will be trickier.

CML’s chief economist Bob Pannell said:

“The macro-prudential interventions announced by the Financial Policy Committee in late June are finely calibrated and precautionary, but could nevertheless reinforce April’s Mortgage Market Review in tipping the UK towards a more conservative lending environment.

“It is difficult to gauge the short-term direction for house purchase activity and mortgage lending more generally, given unknown regulatory impacts and uncertainty as to when the first in a series of interest rate increases will take place.”

While we agree that June was certainly a busy month, it was not record-breaking from our end. It will be interesting to see how the Mortgage Market Review (MMR) affordability guildelines might slow the market down.

Normal mortgage transactions are in the region of 12 weeks, and the MMR kicked in at the end of April. So, will we be looking at longer transactions?

If you have any questions about your own borrowing, give us a call.

Posted in Market Watch

The family that saves together…

Quick pub-quiz question: in what year was the last building society launched?

Give up?

1981 – and it was Ecology Building Society.

Well, that answer could now be contested if you said 2014 because the Family Building Society just joined the market.

The most interesting thing about tthem is their product called the “family mortgage.” It’s aimed at first-time buyers, and would let their family provide security for the mortgage by pooling their money. Their own blurb sums it up:

“The principle behind the Family Mortgage is simple. Most young adults don’t have a lot of money. That means they will only have a small deposit to put down on a property and they miss out on most of the better mortgage rates. At the same time, families may have savings and property that could be used as security for a buyer. The Family Mortgage brings these wider family assets into the mortgage calculation, helping to reduce the cost for the buyer but not asking family members to hand it over as a gift.”

The Mortgage Broker article points out that the family mortgage is not unique; the Woolwich offers the similar “Family Springboard” mortgage. But it is certainly their focus, and it will do interesting things to the market by giving other lenders pause for thought.

Here at Limetree, we love competition. It increases choice, and keeps lenders working hard to win business. We will keep tracking the family mortgages, and watching the Family Building Society as it gets up and running.

Posted in First Time Buyers, Market Watch, Mortgages