Never a dull week in the Mortgage Market!

Never a dull week in the mortgage market!  I was at a presentation from a major lender late last week and who predicted Bank Base Rate won’t move for a good couple of years, but also advised us to ignore their predictions as they have been far from right over the last 3 to 4 years!  Helpful!  We also then saw reports suggesting that the Lloyds Banking Group wanted to reduce their share of the mortgage market from 28% to 25%.  This is a huge reduction.   We also saw RBS publicise a reduction in their share of gross mortgage lending from 14% in Qtr 1 2011 to 11% in Qtr 1 2012.  More signs that although the market is very busy, it is in certain areas, and not necessarily via household names. 

In other news, the Co-Operative Bank decided to withdraw its Interest Only offering entirely from all residential offerings and sadly, after five years of trying, Portillion has decided to call it a day and abandon its lending ambitions.  The latter showing it really is so difficult to launch a new lender in current climates.

Many people ask me “should we fix our mortgage rate now?”  This is a difficult question to answer and one I always answer with a question – are you a gambler?  At some point, Bank Base Rate will increase; I think we are all aware of that and it is just a question of when?  Five year fixed rates are proving popular and competitive in the current climates.  However, if you decided to take an attractively low tracker now with a view to fixing at a later date, be wary that when the BBR does increase, you can almost guarantee that fixed rates will have already been substantially increased! 

Finally, outside AToM we have a box offering ‘Property Today’ papers.  This is a good gauge to the local market and how interested people are in properties each week.  Over the last two weeks, we’ve run out of papers over the weekend (normally they last until Thursday!).  Possible signs of a buoyant local market, or just a lot of people keeping an eye on things?  Who knows…

Could it be a sign??

The latest Bank of England quarterly inflation report suggests that the economy will not now recover until the middle of 2010 (somewhat contradictory to Alistair Darlings recent budgetary prediction!). Analyst’s inflation review indicates that the Bank's base rate is likely to remain at 0.5% well into 2010. Therefore, a short term tracker rate with options to change to a fixed rate with no early redemption charges looks good. Generally known as an ‘all-weather’ product, a few lenders have previously offered this option, although Nationwide is currently the only lender with such an offering….at least for now!
This week, Rightmove.co.uk reported that sellers have increased asking prices by up to 2.4% during May in a bid to maintain their own position when buying. The average asking price is now £227,441 (against £222,077 in April). The Rightmove House Price Index for May shows that the jump in asking prices is the largest the property website has measured, for a single month, since 2003!
More positive news indicates that UK residential property sales have hit an 18-month high. Figures from the National Association of Estate Agents (NAEA) show that the average agency branch sold ten properties in April – compared with eight in March.
RBS (Royal Bank of Scotland) has changed its definition of New Build properties. Any property refurbished, modernised or altered since 1st January 2006 will now be classed as New Build. As a result, the maximum advance on these properties is now limited to 80% for residential and 65% for investment mortgages! This, from a lender who is seeking to lend a further £25bn over the next two years!
On the favourable side, the Abbey have increased their lending values from 60% to 70% on their competitively priced re-mortgages on 2, 3 and 5 year fixed rate products!
Congratulations to Lifestyle Ford of Horsham, who succeeded AToM in winning this years coveted West Sussex County Times Business of the Year Award. Well done!
Finally, you buy a car from a car specialist, flowers from a florist, so for all your mortgage requirements, why buy anywhere other than from your local mortgage specialist?