24 July 2009

Things that gripe..

As we commence our fourth week in the Carfax hub of Horsham, my eyes have been opened to a number of interesting issues. Some which really require comment and others which perhaps I should just let pass me by! That said, and this might perhaps go against my better judgement normally, I want to take the rather risqué route and speak my mind on one particular issue which is of concern to me. One which, in the current climate, is unfortunate and can be detrimental to the house buying public.
I accept that it is a tough market out there and that everyone needs to firstly attract business and then convert what they can. If this is conducted professionally you can retain a customer for life. However, if it is done aggressively you can just as easily lose face and this can be very bad for business! We have lots of long term friends in the house sales sector and find that, in our view, the majority of these do work hard to provide a superb service. But, it appears that one or two may sometimes go a little bit over the top. It is both understandable, and sensible, that when a purchaser puts forward an offer for a property, the selling agent will require evidence that they can afford the transaction and obtain a mortgage. Quite right too! However, when the purchaser is then told that their offer will not be put forward to the vendor unless they place their mortgage through the selling agents own advisers, then this is surely not good or fair practice, in any sense!
Whinge over, and on to more positive matters. Properties appear to be selling and the general level of confidence is increasing in the market almost daily. The Conservatives will dismantle the Financial Services Authority (FSA) if they get into power next year. Not sure if that is a good or bad thing (just in case anyone from the FSA reads this column!). Have a good weekend!

17 July 2009

Going up or coming down? Anyone know about House Prices?

Nationwide launched a 125% mortgage this week! Sadly, most reports failed to spot that this scheme is for existing borrowers, in negative equity, looking to move house! Positive news, but the hype will have teased first time buyers who will have to wait a while longer yet! In the middle of 2007, there were some 28,000 first time buyer products. Today, there are roughly 1,200.
Are you confused about house prices? I am. Nationwide recently reported that house prices increased in June by 0.9%. Halifax refuted this stating a decrease of 0.5% in the same period! If they cannot agree what chance do we have? Your guess is as good as mine. Let’s wait for the Land Registry report, although they are usually three months behind the pace due to reporting timings!
The Bank of England retained base rate at 0.5% last week. Good news for those on tracker rates. Not such good news for the market generally. Customers who have recently finished a fixed rate period with a lender will revert to the lenders currently low standard variable rate (SVR) and remain there quite happily. Lenders SVR’s tend not to change unless bank base rate does. However, it is borrowers moving from lender to lender which helps to stimulate money movement in the financial markets. Borrowers leaving a lender release funds for someone else, and so on. With minimal movements, the lenders enjoy continued excuses to restrict lending! Or, is it me…!
Finally, re-mortgage applications have increased recently. Borrowers looking to secure long term fixed rates are applying at the right time. Some, who are in increasing financial difficulties, are looking for sensible ways to remortgage (not always our recommendation). Others are releasing equity to acquire Buy to Let properties in the current cheaper climate. Whatever your requirements, speak soon to an independent mortgage advisor. You know who to call…

13 July 2009

First Time Buyers are active.

10/7/09 - The French Market brought some colour and a different shape to the Carfax during last weekend. It reminded me just how much we are inexorably linked with our European cousins and, in the mortgage market, this is very noticeable. Members of European states are entitled to borrow money from mortgage companies in UK in the same way and on the same terms as we can. Like us they must prove ability and intent to repay and then, subject to underwriting and due diligence, can take a mortgage on a property here. We have the same rights in European countries too, although it is fair to say that some do not really promote home ownership in the same way as us, preferring rental or long standing family home use. Anyway, it was good to see the colours and hear the Galic language whilst also enjoying sweltering Mediterranean temperatures!
Nearer home, fixed rates on mortgages are rising. Lenders are withdrawing some product ranges and, in some cases, dropping out of the investment (buy to let) market altogether. Is this a sign that there is a gathering nervousness at the welter of rental properties and concern at how they will fare if there are so many that they may soon outweigh the number of possible tenants? If this were to be the case then rental values will decrease and we will enter another cycle of downturn in the sector. Lets hope not!
First time buyers seem to be very active and we have seen a definite upturn in recent weeks. Mostly, 90% is the maximum available to them and rates swing wildly from the mid 3%'s (if you can get the lender to say yes) to the early 7%'s, the latter for five year fixed rates. This may not be such a bad deal as it sounds if interest rates do start to rise anytime soon.

Gone in 60 minutes....product withdrawals!

3/7/09 - It is really pleasing to note that there is an upward surge in consumer confidence in the housing market and this is showing in the mortgage market as well. There is a noticeable intent also on the part of some lenders who are re-visiting criteria and rates to see if they can start to attract more business which will progress from application to completion. For some time now initial applications have been approved in principle but then many cases have run into brick walls somewhere along the line.
More positive news with the Nationwide releasing figures stating that house prices rose 0.9% in June, the third rise in the last four months. It has also pushed up the average house price to £156,442 from £154,016 in May.
Conversely, this somewhat better news has the ‘occasional’ sting in the tale as interest rates are starting to rise and particularly in the fixed rate sector. So, as I keep repeating, make certain that you catch the rate before they rise even further and it is a generally accepted view that they will in the coming weeks and months.
To put this in to perspective, one lender last week sent out notice of their intent to withdraw products. This was sent to all mortgage intermediaries at 2pm. The laughable side was that they gave a deadline of 3pm (same day) to secure the product and rate by completion of a decision in principle (effectively an online application)! Just one hours notice to save rates that we might have been discussing with customers for some days previous! And of course, the replacement rates were all somewhat higher.
Finally, over last weekend, AToM moved to new premises in the Carfax, Horsham. We are right next to the bandstand in the town centre. Please feel free to drop in, appointments are not necessarily required and we’d be delighted to meet with you.

Lenders have service issues...unbelievable!

26/6/09 - Given everything that has hit the headlines recently it was something of a surprise to learn that RBS have agreed a salary package approaching £10m for the new man charged with rescuing the troubled bank, currently 70% owned by us! Am I right to be disappointed that I did not get invited to sit in on the interview?
Putting that to one side, the mortgage market is undoubtedly ‘hotting up’ again. Applications are at their highest level for some time and we are starting to see more ‘sold’ signs appearing almost daily.
For those of you old enough to remember the book ‘Catch 22’ many of our lender friends are now seemingly caught in that trap. Having had to let many of their staff go over the last 15 months or so and with business volumes on the increase, a few are now starting to suffer backlogs. Some lenders are up to 10 days behind and will not fast forward urgent cases causing much difficulty for new customers. Others have daily funding allocations that are released to mortgage intermediaries at 11am and inevitably are all utilised by 11.02am!
Fixed rates are on the increase and we still have some lenders arranging their criteria in such a way that they don’t write much business and this fits with their business plan needs at the present time. So it is a perverse situation we find ourselves in, at a time when we are starting to see rising consumer confidence!
That said, there are still some very competitive fixed rates available but we have to keep a close watch on them as lenders can pull them at a moments notice. Some lenders are offering fee free legal and valuation options on re-mortgages so, if you think it might be time to fix, do it now and catch a good rate with minimal or no costs along the way.