We would be grateful for your assistance in voting AToM as a winner!

Very rarely do I promote AToM in my columns, but this week is an exception!  I wanted to say a huge thank you to everyone who has voted for AToM over the last few weeks in two national consumer magazines.  I'm delighted that AToM have been short listed in the top six, for 'Mortgage Broker of the Year' in the Moneyfacts Awards 2016 and also 'Best Specialist Mortgage Broker' in the What Mortgage Awards 2016.  Two huge accolades for our family run and owned company (now entering it's 25th year!) and great recognition to our hardworking and fabulous  team of staff.  We need further votes though and we would be grateful for your assistance in voting AToM as a winner.  Please visit the websites to find out more.  Thank you in advance.

In other news, next week is a big one for the mortgage industry as new European Directives are embedded into the UK mortgage market. We are without doubt the most heavily regulated market, probably in the world!  Some would say too over regulated, however we have to live with it, take the new rulings on board and try to make it as straight forward as possible for you, the end customer.  There's already plenty of jargon and paperwork when arranging your mortgage.  Whether it be direct with the lender, or via a whole of market mortgage brokerage, you need to make sure you understand everything you are taking on, so don't be afraid to ask. 

Finally, there's been quite a bit of movement on product criteria and innovation over the last week or so with various lenders.  Examples include Leeds Building Society who have launched a ten year fixed rate at just 2.75%.  This product comes with a £1,499 fee and is available to loans up to 65% of the property value.  Whilst Saffron Building Society has launched a 5% deposit product, fixed for five years with the rate slightly under 4%.  With a manual assessment, rather than a credit scoring system, this is an ideal product aimed at First Time Buyers.  Obviously both products have terms and conditions that need to be reviewed, but many lenders like these are looking at ways to gain new customers, as well as increasing their market share!  

  

Don't miss the rates, use a Broker

More mortgage product pulls this week resulting in rate increases. Both Nationwide and Accord withdrew products only giving one hours notice to book the funds. In short, this meant that we had an hour to upload a full application on to the lenders systems to book the rate and secure the funds. One minute over the deadline and the rates were lost. Add this to the recent shenanigans over booking funds with the Woolwich (limited funds released at 12am and gone by 12:01am!) and life as a mortgage broker has been far but dull of late, but incredibly long hours!

The Bank of England’s latest mortgage approval figures show mortgage lending fell by 12% in February. Loans secured on property fell from 108,767 in January worth £13.1bn to 95,976 in February worth 11.7bn. Within this figure loans for house purchase fell from 57,899 in January worth £8.7bn to 48,986 in February worth £7.1bn. I suspect March’s figures will return to an
increase as it was incredibly busy throughout the month!

In comparison, gross mortgage lending by building societies and other mutuals rose 28% year on year in February 2012, figures from the Building Societies Association data shows. New mortgage approvals were up 31% on February 2011 and with gross lending at £1.9bn. This sector of the market appears to have a huge appetite to lend and some great product innovation.

Interest only remains in the spotlight with suggestions from Unbiased.com that one in seven UK households are sitting on an interest-only mortgage with no repayment vehicle. The website suggests that 1.6m properties are simply paying off the interest each month and not repaying capital or saving anything towards paying off their mortgage debt in the future. This is a pretty scary and certainly something that requires a review and not left until ‘tomorrow’. Speak to a independer adviser and work out a repayment plan.

Finally, the Leeds Building Society are the latest to reduce interest only mortgages to 50% of the property value and the Co-Operative Bank have increased their Standard Variable Rate
(SVR) from 4.24% to 4.74%. I’m still unsure how this fits within our markets regulatory rules of ‘Treating Customers Fairly’…

More restrictions on Interest Only loans

Interest Only remains in the Spotlight this week as Lloyds Banking Group and Leeds Building society impose restrictions on those wishing to obtain an interest only mortgage. This is following Santander's interest only loan reduction last week and Barclays/Woolwich previous to that.

Although Santander reduced the maximum LTV on interest only to 50%, they did not change their criteria. However, Lloyds Banking Group (Lloyds, Halifax, C&G) have restricted acceptable repayment plans so that, despite keeping Interest only at 75% of the property value, many
borrowers may not qualify. These repayment vehicles include providing proof of a pension pot in excess of £1m, cash savings are no longer accepted and sale of any residential property can only be used if current equity is over £50k and only 80% of current equity can be used. It is reported
that the other high street providers are not looking to follow suit. But we will see!

In more positive news, those who know AToM will know that, in addition to arranging mortgages for the general public, we are also a specialist packager/distributor looking after and arranging mortgages for other mortgage brokers, estate agents and independent financial advisers nationally. For some lenders, AToM acts as their administration arm, collating information,
instructing valuation and processing applications right up to mortgage offer status. For other lenders, AToM will often be allocated a tranche of funds to distribute for them and AToM advertises and controls the administration process. Any mortgage broker, independent financial
adviser or similar, who require these certain products, will often have to come via AToM to gain access to such products. The benefit to the lender is that AToM carry out all the work, including taking telephone calls, requesting information from employers/accountants, collating documentation, and more. So it can be cost effective for the lender.

With this in mind, we are delighted to announce our latest lending partner in this arena, called MBS Lending (part of the Melton Mowbray Building Society) and we now package and distribute products for them. This lender specialises in assisting customers who have had financial issues.
This is one area, more so in recent climates, that appears to be on the increase again and there are lenders actively looking to lend. Terms & Conditions apply and APRs will be based upon individual circumstances.

The Highs and Lender Lows...

Let’s start this week with some really good news! Halifax have announced that they are going to refund stamp duty for first time buyers who purchase properties up to £250,000. They will rebate the 1% stamp duty figure which takes effect above £175,000 after completion. This is available to first time buyers only and is seen as a positive move towards kick-starting this sector of the mortgage marketplace. Let’s hope other lenders now follow the HBoS giant and find other ways to stimulate new growth.
Contrastingly, the UK's biggest building society, Nationwide, has changed its reversion rates for new clients at the end of their fixed rate period. Whilst existing customers are guaranteed to pay no more than 2% over the Bank of England base rate when their current product term ends, new customers, who take a mortgage after April 30, will instead revert to the society’s new 3.99% variable rate (which will not track BBR).
Other news this week, the Leeds Building Society announced the launch of two new fixed rate mortgages for 5 and 10 years. With a loan to value available up to 85 per cent on the 5 year fixed rate deal (5.69%, 5.9%APR) and up to 75 per cent on the 10 year fixed rate loan(5.49%, 5.9% APR), borrowers who want to lock into the certainty of a long term fixed rate mortgage could be interested in these products.
The Budget was something of a mixed bag and certainly not a welcome one for those in receipt of high incomes. It does seem that we are entering into a phase where the tax payer is going to carry the can for many years to come as a result of the current government’s volume borrowing.
That said, another long weekend ahead provides ample time to review financial paperwork and here comes a plug! AToM has diversified into a number of new areas to ensure that we provide a one stop financial ‘shop’ for you. Historically, we are one of the longest established mortgage brokers in West Sussex and more recently have expanded our offerings which now include All Types of Mortgages, secured loans, wills, life/car/house/travel/pet insurances, equity release, bridging/commercial loans, debt management plans, IVAs, Utility Switching and other products such as Sky TV, Vodafone and 3 mobiles! AToM has them all. As always, no appointment is required, so please visit our offices in North Street, Horsham, or visit our website for more information.