13 August 2010

House Price Confusion

First Time Buyers have taken another battering this week as the Coventry Building Society scrapped the option for interest only mortgages for those getting on to the property ladder for the first time. Any First Time Buyer applying for a mortgage with this lender will now only be offered a repayment mortgage. This follows recent moves and changes of criteria for Interest Only mortgages from various lenders including Northern Rock and Lloyds Banking Group in reaction to the FSA’s Mortgage Market Review which includes commentary on this subject. I don’t think the days are numbered for this type of mortgage, however we are seeing many lenders urging and some would say ‘pushing’ customers to a repayment option from day one.

Despite the restrictive lending nature of the mortgage market over the past year or so, lenders are still reporting massive profits for their half year. £1.1bn here and £3.95bn there, the list goes on. Although I’m sure the profits would have been more, had some of the excessive bonuses not been paid. Although unknown currently, I’m sure we won’t be surprised to learn these will be in very high numbers too! Just think, if these vast numbers had been reinvested in to actual lending figures, I may not have anything to whinge about!

Finally, the confusion over house prices continues. The Royal Institute of Chartered Surveyors (RICS) reported that house prices dipped in July. RICS says difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential home buyers. Nationwide also reported a 0.5% fall in average property prices in July, the first drop in five months
However, Halifax disagrees in that their House Price index suggests that prices increased by 0.6% which was an upturn on the decrease reported in June. With such differing figures from various respected sources, it’s no wonder that the whole house buying process remains confusing for one and all, discouraging some from wanting to rush to market.

06 August 2010

Foreign Mortgages? AToM win BMA!

Lenders seem to have been the focus of my articles more recently and in more of a positive light! Having had lengthy talks with many lenders over the last few weeks, I believe we will see more aggressive products in the coming months as lenders aim to finish the year on a high and with volume business. Fingers crossed and watch this space!

We’ve seen a huge increase in foreign mortgage applications over the last 10 days or so with people purchasing abroad, some for residential purposes, but in the main for investment or as a holiday home. As we emerge from a global recession, many countries have been hit just as hard as the UK has, if not more. We recently had an enquiry from an individual purchasing a residential property in Spain. They were re-mortgaging their UK property to raise the deposit and were letting this out. The real eye opener was that the Spanish appear to be very proactive for house sales and the Spanish lender offered an 80% loan to value and gave them the first 3 years interest free! Scary!

Back in the UK, there have been positive movements by some specialist lenders. Although not necessarily household names, most of them have large parents. Such an example is a company called igroup (owned by GE) who have recently increased their loan to value from 75% to 80% on some products. They have some superb rates of interest and an appetite to lend. They will also allow first time buyers but will only deal with the employed. However, they will take a view on any historic minor financial problems and price to risk accordingly.

And, finally…I’m delighted to announce that AToM have picked up our fourth major industry award of 2010! We were thrilled to be awarded a British Mortgage Award at a recent event held in the London Hilton, Park Lane. Attended by over 500 mortgage professionals, AToM came top of the class in the Specialist Mortgage Distribution category and the award was presented by Sir Geoff Hurst MBE. This is a great accolade and testament to the great team we have here at AToM.