Buy to Let now with free valuation and free legals (including purchases*)

With the year end closing in fast, and new regulations only just around the corner, we are starting to see some lenders advising their plans for next year.  Many lenders have increased targets and AToM has been in contact with a number who are looking to launch or re-launch (having been dormant) during the coming months.  The majority of industry pundits, including myself, don't believe rates will now change until late 2016, or early 2017.  So with a slightly quieter market, competition, especially rates, should be fierce for the remainder of this year and moving into next year.  This can only be good news for the end consumer.

For those with Buy to Let / Investment property interests, we have seen new lender, Foundation Home Loans, stir up the market as they have launched products with free valuations, free legal costs and will accept customers who have no minimum trading period on employed or a self employed basis and no minimum income requirements.  This is in addition to looking at customers who may have had a blip or two on their credit history.  Although a recent new entrant to the market, Foundation have an appetite to lend and are innovative.  I think we will see a lot more from them in 2016.

Another lender has launched a five year fixed rate for Buy to Lets with a rate sub 4%.  This whole sector will remain buoyant while the rental market continues to grow at a substantial pace.

Nationwide House Price Index confirm UK house prices increased by 0.6% in October, with the annual price growth edging up to 3.9% from 3.8% in September.  The average house price now stands at £196,807!

And finally...due to an increase in business volumes, we’re looking for staff to join our expanding AToM team.  If you know someone in the mortgage sales sector, with the relevant qualifications (or studying towards them) and who likes to be kept very busy, then please ask them to get in touch! 

The PM once told us we'd never had it so good....

Predictably, the major talking point in financial services is the FSA’s Mortgage Market Review. Some of the proposals include:

1) Removal of Self Certification mortgages:
Self Cert mortgages account for approximately 10% of the residential market. True, this offering has been abused by a few yet, in the main, Self Cert is a valuable product offering. Once abolished, existing customers may become trapped in their current mortgage. Possibly with a lender no longer operating meaning that they may be unable to refinance or move. At current low interest rates this may not be an issue. However, when rates increase quickly, a new mortgage may be difficult to realise and may result in customer arrears or, worse still, repossession due to lack of options. Those who are self employed and have difficulty proving income (which may come from a variety of sources) or recently established businesses will undoubtedly find it more difficult to obtain a mortgage, if at all, should these new proposals be approved.

2) Lenders to assume responsibility for a consumer’s ability to pay:
Why give credit to someone who can’t afford it? This should be happening now! I agree with this in principle but it needs to be widened to the Credit Card companies still sending out “pre-approved - sign here” forms on a daily basis. If I said yes to them all, I could be ‘quid’s in’ but could I afford the repayments…?

3) Requiring all mortgage advisers to be personally accountable to the FSA:
This one is interesting. We are already authorised and regulated by the FSA and this proposal wants us to be accountable for the mortgage you take. In effect this proposal removes the consumer’s responsibility for any transaction undertaken. Whatever happened to Caveat Emptor? Can I buy a lottery ticket and then sue the provider if I don’t win?

4) The regulation of Buy-to-Let and all Secured Lending:
Great idea and I 100 per cent agree, once authorisation and regulation of the current residential markets have been tried, tested and proven! If they were, would we be in this mess?

Obviously there are many more proposals, but I’ve so few column inches! The certainty with this review, if implemented, is that consumers will have less choice and pay more. Do you remember a PM telling us that we’d never had it so good?