2013 was the foundation for a great 2014!

For my last column of the year, I’m not going to do the obligatory round up of the year!  Nor will I gasp my astonishment at how quickly the year has gone by.  What I will say is that I think that 2013 has been a year of foundations for what we all hope will be a fantastic year in 2014. 

Total lending for 2013 was predicted to be in the region of £150-160bn.  The actual figure will be nearer £170bn.  Predictions for 2014 are already being suggesting volumes will reach £190-£200bn (2007 was £370bn!).
Although the funding for lending scheme is being withdrawn in January, a year earlier than planned, the financial sector is in a strong position and one that we hope will be able to stand on its own two feet to move forward successfully over the coming months.

We have a new housing minister, who so far seems to be singing from the right hymn sheet and might be a friend to the industry, rather than predecessors who thought they knew best.  Working together is key for all sectors.

It is also reported that there are a number of lenders looking to enter the UK market who are in the process of getting their FCA authorisation.  More competition is great news for the economy and  can only be good news to the end consumer.

The only negative hanging over all of our heads is that the Bank of England base rate has to rise at some point.  The million dollar question is when?  If you are looking to review your mortgage at any time soon….don’t leave it too late.

Finally, a heartfelt thank you for reading my column over the last twelve months.  It has been an enjoyable(!) experience each week trying to provide an insight in to what happens behind the scenes in the mortgage market.  But I do love it!  No two days are the same and how can anyone not enjoy helping people reach their dream!? 

Thank you to all those who have used AToM to source and arrange their mortgage requirements.  We’ve had a fantastic year and enjoyed growth in both volume, with November amounting to just shy of £20m in lending, and staff numbers, with our headcount now over 20!  And what a great team they are.

On behalf of all the staff and directors at AToM, we wish you and your families a very Happy Christmas and Prosperous (& Relaxing) New Year!   We look forward to working with you in 2014.

More lenders offering Help to Buy. Activity at AToM huge!

There has been substantial mortgage activity happening across the country as we roll towards the Christmas break and festivities.  November was AToM’s second best month over the last four years for new business levels!  This is slightly unusual for this time of year, but then nothing surprises us any more in the current climates!  I certainly shall not complain at being very busy but do express our heartfelt thank you to all those who are using AToM and making use of some of the fantastic exclusive mortgage products available via our Horsham branch!

It is good to see that more lenders are offering the Help to Buy schemes.  Virgin Money is the latest to launch products through the Government’s Help to Buy Mortgage Guarantee.   Virgin Money will offer customers with smaller deposits two year fixed fee saver deals up to 95% of the property value.  In addition, all of their 90% and 95% deals now come without a product fee, and remortgage deals are available up to 90% of the property value.  The first challenger bank to join the initiative, Aldermore Bank will launch with the scheme on December 16^th.  Obviously terms and conditions apply and APRs will be dependent on the product chosen.

It always surprises me how few people actually know what rate they are on, the type of mortgage, i.e., fixed rate, tracker rate, etc, and whether they are paying interest only, or capital repayment. Unsurprisingly, almost everyone knows what it costs per month to the nearest penny!  They will haggle for a £10 discount on a new washing machine whilst letting ‘sleeping dogs lay’ when it comes to their mortgage where they might save hundreds!  It’s very easy when the promotional rate period comes to an end to keep your mortgage with the same lender, ‘brush it under the carpet’, and deal with it ‘tomorrow’.  But, we all know tomorrow never comes.  A review of what’s on offer from other Lenders could give you a nice start for 2014, especially if you’re currently on a Standard Variable Rate, or equivalent.   Many lenders are offering superb remortgage opportunities with minimal costs to change, including free standard valuations and legal costs.  Rates are competitively low and mortgage product choice is at its highest for some time.  So pull out that paperwork and have a no obligation conversation with your local, independent and whole of market mortgage advisers!

Funding for Lending to be stopped, market confidence good.

The big news of the week is the imminent withdrawal of the Funding for Lending scheme, a year earlier than planned, by the Bank of England.   The FLS scheme was launched in July 2012 and currently offers cheap loans to lenders who in return are expected to pass on lower rates to the end consumer. 

The reasoning behind the decision given is to encourage the lenders to re-focus and increase funding loans to small businesses, rather than mortgage lending.

At a period when house prices are on the increase, lenders are citing that increased volumes and Help to Buy offerings are boosting consumer confidence, the timing might not be great (please note that Help to Buy is unaffected by the FLS scheme withdrawal). 

Many suggest that this is a sure sign that the mortgage market is in a position to move forward on its own two feet.  Only time will tell!

However, should you rush and panic to secure some of the fantastic rates currently available?  This is a difficult one to answer.  The lenders have until January to request funds from the scheme and we have no intricate small print details as to the closure of the scheme or deadlines.  As we all know, rates can really only go one way and we’ve all been trying to second guess when this may occur.  I’m hoping this is not when it will kick start!   

Nationwide’s House Price Index suggests that property values increased by 0.6% in November compared to October.  The average property price is now £175k compared to £164k a year ago.

And finally, I’ve mentioned it a number of times throughout the year, but make no apology for mentioning it again!  If you have an Interest Only mortgage, do make sure you keep reviewing the options for repaying it back.  For a customer to get to the end of their mortgage term and still owe exactly the same as when they took it out, with no form of repayment apart from selling their property, creates a major headache for the lender, especially when they want their money back!  This will once again be a major part of lenders reviews in 2014, so be on top of your options, before the lender calls!  If in doubt, seek professional advice.