Thank you for reading my columns! Have a super Christmas and relaxing New Year!

Quite unbelievable that this is my last column of the year, where has the time gone?  It's been a busy year but at the same time, frustrating, testing, enjoyable and thankfully full of both hope and opportunities.

As we shut the door on 2014, we look forward to next year and the promise of good things that lay ahead.

We have a new housing minister (again!) who looks like he may understand our markets and could be the right man for the job.   The housing market itself is vastly under delivering the number of properties actually needed, so house building and growth in 2015 will have to be on the increase.

The new Mortgage Market Review regulations have settled down and are now a daily part of our lives.  We look forward to the next big thing to impact our lifestyles - the EU Mortgage Directive, due in 2016!  And, of course, we have the Election just round the corner. Exciting times!

However, lending for 2014 is expected to reach circa £200bn.  Many mortgage pundits are expecting this to increase to £225bn in 2015, an increase of 12% (+).  This will ensure lenders remain competitive to attract new business and meet targets and this can only be a good thing for the end customer.

Finally, a heartfelt thank you for reading my column.  I've enjoyed providing a (hopefully) unbiased weekly insight to what happens behind the scenes in the mortgage market.  What an eventful year it has been to report on!

Thank you to everyone who has instructed AToM to source and arrange their mortgage during the past twelve months. It has been a fantastic year and we have enjoyed growth in both volume, November saw more than £24.5m in new applications and staff numbers, with our headcount now over 25 between our two Horsham offices! They are a great team.

On behalf of all the staff and directors at AToM, we wish you and your families a very Happy Christmas and a Relaxing and Prosperous New Year! 

Stamp Duty changes are a good thing.

There's really only one place to start this weeks column and that's with the superb news released by the Chancellor in regard to changes to Stamp Duty.

With effect from Thursday 4th December, stamp duty will be applied as a progressive tax.  Buyers will pay no tax up to the first £125,000, they will be charged 2% on the additional portion up to £250,000, then 5% on any additional portion up to £925,000 and 10% on the additional portion up to £1.5m and 12% on any portion above.

This is a big step forward and very positive for house purchasers.  On the old scheme, a person buying a property at £300k would have paid 3% equating to £9,000.  On the new scheme, there is nothing to pay on the first £125k, 2% to pay on the £125k to £250k (£2,500), and 5% on the remaining £50k (£2,500) making the new total £5000, a saving of £4,000 in total. 

Although this is a hugely positive and much applauded move, there is still much uncertainty about customers actually being able to achieve a mortgage.  Until lenders criteria is truly relaxed and funding becomes more widely accessible, cash buyers are likely to be the main benefactors of these rewards rather than the first time buyer or home mover. 

Recent data published by the Bank of England has reported that the average Lender Standard Variable Rate, the rate that which many customers revert to after their promotional or fixed rate period ends, has risen to 4.53%.  This is up 0.16% over the last year, despite the average two year fixed rate dropping by over 0.75% in the same period and the Bank of England base rate not changing for over five years. They have also noted that the largest proportion of mortgage borrowers have not experienced a rate rise for more than five years (some for more than seven) and are concerned about the possibility of what is generally known as ‘payment shock’. For example, on a £100k mortgage a 1% rise in rate will mean a monthly increase of circa £83.33! For some, this points towards the possible need to consider a fixed rate to avoid this possibility.  Maybe time to talk to your independent mortgage adviser? 

People over 40 yrs old should be able to get a mortgage!

It was interesting to see many of the national press last week covering stories on how difficult it now is to get a mortgage if you are aged over 40.  The articles suggested that many first time buyers are now not able to purchase their first home until they are 40 years old, or even up to 50 years old, report some lenders.  However, this can then limit the availability of mortgage finance, as many lenders want loans to be paid off by normal retirement age (67).  With the Mortgage Market Review (MMR) rules now firmly embedded in the day to day calculation of mortgage finance and lenders making decisions based on the customers ability to pay back what they have borrowed, age can now affect affordability. Especially for the more mature applicant or if a customer wants to retire before the end of the mortgage term.  Of course a shorter term means a hike in monthly repayments which affects affordability issues, and so on. 

Despite many high street and household name lenders setting a maximum age at the end of the mortgage term, usually circa 70 years old, there are an increasing number of smaller building societies and other specialist lenders who will consider a much older maximum age of 80+.  This will be subject to affordability, lending criteria and the customer working or having a defined income long after normal retirement ages.

The rules and regulations are there to protect the end consumer, and in the main are working as required.  We will see criteria relaxed over time, and they will need to be as many customers are now working long in to their later years.

So the bottom line is that just because you are aged over 40, does not mean that mortgage finance is unavailable to you.   But be wary that any lender will want a full and detailed explanation on how you will continue to make your monthly mortgage payments if the term of your loan exceeds 'normal’ retirement age – whenever that may be!

Rates decreasing again!

Just a few weeks from the festivities and a number of lenders are still cutting rates.  Plaudits go to Natwest Intermediary Solutions who cut 87 rates in their Residential and Buy to Let range with the largest being a reduction by a huge 0.91%.  All good news heading into the final stages of the year.

The Council of Mortgage Lenders have released figures confirming that Octobers gross lending figures were up 8% compared to the same time in 2013.  Circa £19bn was lent during the month, compared to £17.5bn a year earlier and up £1bn from this September. If activity here is anything to go by, this will be higher again in November.  Busy times!

The market is experiencing large increases in requests for secured loans.  A secured loan is a 2nd, or subsequent charge, designed for homeowners and which allows the equity in their property to be used as security. Loans are usually between £3.5k and £2.5m. There are usually no 'up-front' fees to find although costs are added to the advance.

Often, customers looking to remortgage to raise additional funds are already on an attractive rate with their lender.  To move away could be costly and they could end up on a much higher interest rate.  Depending on the amount already lent as a mortgage, compared to the value of the property, most lenders will allow a secured loan to be added as additional borrowing.  

And finally, I’ve mentioned it a number of times throughout the year, but make no apology for mentioning it again!  If you have an Interest Only mortgage, do make sure you keep reviewing the options for repaying it back.  For a customer to get to the end of their mortgage term and still owe exactly the same as when they took it out, with no form of repayment apart from selling their property, creates a major headache for the lender, especially when they want their money back!  This will once again be a major part of lenders reviews in 2015, so be on top of your options before the lender calls!  If in doubt, seek professional advice.

Can Lenders handle an increase in business in 2015?

Many mortgage market pundits are now trying to predict what will happen in 2015 and the overall volume of the mortgage market.  Pre credit crunch figures amounted to gross mortgage lending of £363bn (2007).  In 2013, it was circa £176bn.  This year, it is estimated to be in the region of £200bn and many, including myself, think that 2015 will see an increase of around 12.5%, circa £225bn. 

However positive this is, there are many concerns.  Firstly, the number of lenders who have left the market for whatever reason, since the highs of 2007, have not yet been replaced.  Neither have staffing levels within those who continued trading, but who downsized.  As such, lenders are currently incurring delays given today's volumes, let alone the large increase that is expected for next year.   Secondly, it is a similar story for surveyors.  Every property has to have a valuation completed and the surveyors are the eyes of the lender on mortgage transactions, confirming that each property provides suitable security for mortgage purposes.  This is a complex and niche market and therefore takes time to train people to the relevant standard.  Again, could this area of the market take on an increase of 12.5%?  

There are many many other areas begging answers, but the bottom line is that lenders will need volume to meet their increased targets.  With new lenders launching and an already quite saturated market, competition will be intense and aggressive and this can only be a good thing for the end consumer.

With this in mind, the quickest area for lenders to increase volume is in the re-mortgage market.  With an estimated 400,000 customers coming to the end of their fixed or discounted rate periods between now and March 2015, lenders will be targeting this share of the market for quick business.  Many lenders offer free valuations (normally a 'drive by' or automation) and free legals to attract new customers.  If you're one of those with a rate due to expire, now is probably a good time to shop around and you can start the process a few months in advance! 

Lenders still competing for business

There have been a number of remortgage applications recently for those looking to raise funds to purchase other properties or to make improvements to their current homes.  Just around the local area, I have seen an amazing amount of building work and renovations / extensions being carried out.  Many home owners appear to be improving their current residence rather than taking the big leap of selling and moving up (or down) the ladder.  This appears consistent with the general view that there is a shortage of properties up for sale and in fact, some agents have told me that they are becoming quite worried about stock levels in the early part of next year.

Other consumers might be making the next step, but are then renting out their current property on a Buy to Let basis rather than selling it.  Nice if you are in that lucky position!  The rental market is certainly buoyant and showing no signs of slowing down over the coming months. So a Buy to Let might provide you with a modest return for your investment and may be the start of building a little portfolio nest egg for later on life. We have noticed that this is a growing desire for many who fear that their pension arrangements may not be sufficient and that rental income may be a suitable supplement.

Lenders are still competing for business even as we move in to the final stages of the year.  Over the last week we’ve seen further rate reductions in the arena for first time buyers, those wishing to remortgage, the Buy to Let sector and the specialist bridging/short term lending market has seen movements in both criteria and rate decreases.  There are many opportunities whatever your circumstances and lenders are willing to have a conversation in order to do the right deal. 

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! 

Remortgage before Christmas?

Now is the time I tend to get asked "can I re-mortgage before Christmas"?  In short, yes, this should be possible.  However many lenders are 5-10 working days behind in their underwriting of applications (some are longer!) and there are also delays in getting a surveyor out to see your property (effectively the 'eyes' of the lender).  So the quicker you get the wheels in motion, the more likely you are to get the process completed in time for Christmas.  Rates are so low currently and lenders are desperate to do business, but the reality is staffing levels are still some way short of where they need to be and the lenders are creaking with the volume of business.  However, rates are fantastic so if it is something you are considering, do review your options sooner rather than later.

Product choice is the best it has been for some time and this is across all sectors, not just the residential market.  As the high street lenders creak at the seams, this also means that many more customers are being turned away, for whatever reason.  Smaller and more manual assessment lenders have realised this demand for assistance and can offer help in a number of ways.  Whether it is catering for those who might have had a historic credit blip;  those looking to buy a property for investment; those looking for shared ownership; those looking for a property with a commercial element or those looking for someone to 'think outside the box'………there are many possible funding line options, if you know where to find them.  The human decision making process is making a comeback!

Finally, the Nationwide House Price Index has reported that house prices rose just 0.5% in October 2014.  They also suggest that the market has 'lost momentum' as the annual house price growth change has dropped from 9.4% in September to 9% in October.  NHPI suggest that the average house price now sits at £189,333.