Another year yet..

Every year, the mortgage industry holds an exhibition for all providers in London. The event lasts two days and it’s a good chance to meet lenders, discuss business with competitors, and review new product providers, etc. However, this year, it was somewhat of a small affair held at Olympia and only five or six out of the 60 exhibitors (normally 200+) were lenders happy to invest in promoting themselves and their product offerings! I still decided to visit and met with those who were participating and the general consensus was buoyant and one of optimism. This was until day two, when the last remaining Self Certification (no proof of income) lender withdrew from the market. If there’s one thing the market needs right now, it’s more lenders, not less! Although only lending a small amount compared to the high street names, a couple of billion is still a lot of lending in the specialist markets! Less than a week later, we’re already seeing a gap in the market which Self Cert used to fill.
The other message, repeated by various sources, was that the expectancy for new lenders to arrive and for lending to increase dramatically is still another year away. What does this mean? In short, the lenders currently lending can control the market between them. They have limited competition and, as long as they hit their own internal targets and profitability, need not reduce rates and/or fees to attract more customers. They can also keep criteria controlled and have a limited appetite to review applications that don’t quite fit their standard mould.
I’ve said it before, but it needs re-iterating again and again - if you have plans to apply for a mortgage in the not too distant future, keep your head above water. Don’t miss or make late payments to any provider. All financial institutions will base their decision initially on your credit history. If you have missed or late payments, or even a lot of recent searches (from multiple finance/mobile/car/home insurance applications), this could be detrimental to your ability to obtain finance, at a competitive rate. If you have not reviewed your credit search before, get it for free (for 30days) from the AToM website. It’s well worth a review and a good insight on how attractive you look to a lender!