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Working together to navigate the changing market

Responding to the needs of customers affected by the COVID-19 pandemic, mortgage payment holidays can be extended for a further three months, under plans from the government and regulators.

The availability of a three month mortgage holiday was first announced in March as part of an unprecedented package of support for individuals, businesses and the economy due to the COVID-19 pandemic. Figures from UK Finance show 1.86 million mortgage payment holidays have been issued as of May 28th 2020 – equivalent to one in six mortgages.

Regarding the mortgage payment holiday scheme, on April 3rd 2020 Springtide Capital cautioned:

“The money you save from a payment holiday will need to be paid back at some stage during the lifetime of your mortgage and are specifically aimed at those that find themselves in financial difficulty. We encourage you to speak with one of our experienced brokers and we will help you understand the pros and cons specific to your mortgage. It is important that you understand the potential implications and all your alternative options”

Springtide Capital further strengthened their position later the same month stressing that borrowers should only take a repayment holiday as a “last resort”.

What to expect:

The Financial Conduct Authority (FCA) has published new draft guidance for lenders which will set out the expectations for firms and the options available to their customers. Following a short consultation, the guidance is set to come into force imminently and lenders will contact their customers whose mortgage holiday is coming to an end.

The outline guidance is set out as follows:

  • Customers who can afford to return to full repayment should do so in their best interests– at the end of a payment holiday, firms should contact their customers to find out if they can resume payments and if so, agree a plan on how the missed payments will be repaid.
  • Anyone who continues to need help gets help– lenders should continue to support customers who have already had a payment holiday where they need further help. Firms are expected to engage with their customers and find out what they can repay and, for those who remain in temporary financial difficulty, offer further support. As part of this firms should consider a further three-month payment holiday.
  • Extending the time the scheme is available to people who may be impacted at a later date– customers that have not yet had a payment holiday and experiencing financial difficulty will be able to request one until 31 October 2020.
  • Keeping a roof over people’s head during a public health crisis– the current ban on repossessions of homes will be continued to 31 October 2020. This will ensure people are able to comply with the government’s policy to self-isolate if they need to.
  • Payment holidays and partial payment holidays offered under this guidance should not have a negative impact on credit files. However, consumers should remember that credit files aren’t the only source of information which lenders can use to assess creditworthiness.
  • This guidance would not prevent firms from providing more favourable forms of assistance to the customer, such as reducing or waiving interest.
  • Firms should consider signposting customers towards sources of debt advice. Debt advice may be helpful for customers coming to the end of payment holidays and may be particularly useful for consumers with pre-existing payment shortfalls or who are likely to be in longer-term financial difficulty.
  • When implementing this guidance, firms should be particularly aware of the needs of their vulnerable customers and consider how they engage with them. For customers who aren’t able to use online services (such as digital channels), firms should make it easy for customers to access alternatives.

Christopher Woolard, Interim Chief Executive at the FCA, said: ‘Our expectations are clear – anyone who continues to need help should get help from their lender. We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice. Where consumers can afford to re-start mortgage payments, it is in their best interests to do so. But where they can’t, a range of further support will be available.’

It has been recently reported that Joe Garner, chief executive of the Nationwide Building Society has stated that a borrowers credit file should be marked if they take a further mortgage holiday. It has not yet been decided whether further mortgage repayment breaks will be marked on credit files. Currently, lenders can see whether a holiday has been taken without it being negatively marked on credit history.

Henry Knight, Managing Director of Springtide Capital commented:

“Our advice remains the same, a mortgage holiday is only for people who absolutely need one. We are pleased guidance is being set out but we urgently need to hear from lenders to understand how this further mortgage payment holiday extension will impact borrowers. Brokers need banks to be transparent on the implications of a borrower taking a mortgage holiday”

This is a difficult and changing time and it is not yet apparent what the long-term impact of the payment holiday scheme will have on both borrowers and the market. To a large extent, the majority of the financial effects of the lockdown have yet to be fully realised, but ultimately it serves no one’s interests if a borrower takes on an unaffordable mortgage.

The mortgage payment holiday scheme is a vital lifeline to those homeowners who are suffering financially due to the impact of the COVID-19 pandemic. But, whilst helping with short-term cash flow issues, a full understanding of the implications of a mortgage payment holiday must be thoroughly investigated. Lenders must be transparent in how they are going to view or interpret information in the medium to long term. The mortgage market has a strong appetite to lend and is committed to helping those customers who need assistance. The upcoming regulation from the FCA will help provide certainty for all parties.

Sources:

https://www.fca.org.uk/publications/guidance-consultations/mortgages-coronavirus-updated-draft-guidance-firms

http://emaila.ukfinance.org.uk/q/1H8LdNb8HjSWcgJdMWTNN/wv

http://springtidecapital.com/

https://www.fca.org.uk/news/press-releases/fca-support-customers-struggling-mortgage-coronavirus

https://www.mortgagesolutions.co.uk/news/2020/04/22/brokers-warn-mortgage-holidays-should-be-last-resort-for-borrowers/

https://www.fca.org.uk/news/press-releases/fca-support-customers-struggling-mortgage-coronavirus

https://www.bbc.co.uk/news/business-52847131

 

Positive steps

The housing market has re-opened to a promising start in England. There is cautious optimism as new regulations have been embraced and practices modified. The changes made to accommodate the COVID-19 pandemic have been many and the industry has proven to be resilient and flexible.

Safety First

Restrictions began to ease three weeks ago with comprehensive guidance published by the Government. This document is frequently updated. Pan industry guidance from the Royal Institute of Chartered Surveyors (RICS) has supported the return to work of thousands of support professionals who play a critical role in the housing sector, specifically on physical inspections for mortgage valuations and home surveys. The document that outlines safe practices is relevant to property agents, lenders, mortgage advisers, property lawyers/conveyancers, surveyors, energy assessors, property managers, home removal and associated professionals such as contractors involved in the property development, management and the home moving processes. Ensuring social distancing practices are adhered to has proved key to re-opening safely and to regaining buyer confidence.

Surge in buyer demand

Buyer demand across England surged by 88 per cent after the housing market reopened, figures from Zoopla show (correct as of 27th May 2020). The website detailed that almost 60 per cent of buyers in the UK are planning to continue with their search for their next property. Although, 41 per cent said they have put their plans on hold with loss of income, uncertainty in the market and lack of confidence in future finances given as reasons for this decision.

Richard Donnell from Zoopla commented:

“The scale of the rebound in demand for housing is welcome news for estate agents and developers, but it is also surprising given projections for a sharp rise in unemployment and a major decline in economic growth. Many households are likely to have re-evaluated what they want from their home. This could well explain the scale of the demand returning to the market.”

Mortgage enquiries

Brokers were unfurloughed and advisers returned as mortgage market activity increased. As solicitors returned to near pre-lockdown levels, completion dates are now being set and purchases progressed.

Searches for products and mortgage deals across the housing market started in earnest and the number of product illustrations downloaded by brokers has increased for the fifth consecutive week, data from Mortgage Brain reports. Mortgage Brain highlights a number of interesting facts (data correct as of 3rd June)

  • Over the past seven days the number of European standardised information sheets downloaded by mortgage advisers increased by 11.5 per cent.
  • Volumes have increased by 27.7 per cent since the housing market formally reopened three weeks ago and by 43.7 per cent from the lowest point seen in the week ending April 26.
  • However, ESIS downloads are still down by 23.7 per cent on the nine-week average to March 16.
  • The number of available mortgage products now stands at 8,635, which is 2.2 per cent higher than last week and 16.3 per cent higher than the low point in the week ending April 12.

Kevin Roberts, director, Legal & General Mortgage Club notes also that there are many promising signs:

“We saw lenders …returning to 90 per cent LTV and my conversations with advisers across the market suggest that they are seeing positive interest from clients as well. Our data also shows that adviser searches on behalf of a wide range of customers, from first-time buyers through to landlords, are increasing too.”

Henry Knight, Managing Director of Springtide Capital commented:

“The initial surge in the market is a welcome sign. The substantial amount of effort to make this happen whilst securing the safety of all parties is a huge achievement. All involved in the industry, my own staff included, have proved to be flexible and resilient in adapting practices and procedures in line with regulations throughout the COVID-19 pandemic. It has been inspiring to see the dedication from all involved, and to see how the market continues to evolve to meet the unprecedented situation we have all been faced with”

First-time buyers and key workers will get 30% discount on new homes under the government’s proposed new ‘First Home’s scheme.

First-time buyers and key workers and will be able to buy new-build homes with a 30% discount under a new scheme being proposed by the Government. It will be designed to help people in areas of high demand, who would be unable to afford to buy a home locally without the discount. It is anticipated that it will enable first-time buyers in England to save an average of nearly £100,000.

The government consultation for the design of ‘First Homes’ is currently underway. Key workers, such as nurses, police officers, firefighters, and teachers, as well as armed forces veterans, will be given priority to take advantage of the initiative.

There is no doubt that it will require time and patience for the market to fully recover. There is much uncertainty about what lies ahead and many pressures we face are still present. Economically we will face significant challenges. Some areas of the market may take longer to bounce back than others, for example purchases by overseas clients will remain slow until travel restrictions are lifted. But there are also many positives and the way we have reacted and adapted within the industry is heartening. There is much liquidity in the market, lenders are keen to lend, backlogs have been cleared and initiatives are present to help those with financial challenges. As an industry we have pulled together successfully and are ready to help buyers with their next steps.

………………………….

Sources:

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/homes

https://www.rics.org/globalassets/rics-website/media/news/covid19/covid-19-guide—re-opening-the-uk-home-moving-market-13-05-2020.pdf

https://www.zoopla.co.uk/press/releases/demand-for-housing-in-england-jumps-above-prelockdown-levels-as-60-of-potential-buyers-say-they-will-push-ahead-with-their-plans/

https://www.mortgagesolutions.co.uk/news/2020/05/26/brokers-unfurlough-advisers-as-mortgage-market-activity-jumps/

https://www.mortgagestrategy.co.uk/news/market-momentum-builds-mortgage-brain/

https://www.mortgagestrategy.co.uk/opinion/comment-open-for-business/?eea=eHVnWE93ZDhyYWF1YVE3YlZiamUzR0JEckd6eUwyMDhNT2dkN1ZJZXF6WT0=&n_hash=576

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/864265/First_Homes_consultation_document.pdf

A positive start to 2020

Post election bounce in the housing market signals a positive start to 2020

The housing market is responding positively to December’s election result, delivering much-needed stability for home-movers, new Rightmove data has revealed. *figures correct as of 19.02.20

Rightmove reports that there has been a 2.3% surge in the price of property being listed for sale. This is the largest monthly rise ever recorded at this time of year. The previous highest January rise was 2.2% recorded in January 2015. This is an encouraging sign for an active spring market ahead.

Commenting on this renewed level of optimism, property expert Miles Shipside at Rightmove said:

“These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability. The housing market dislikes uncertainty, and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home-movers to hesitate. There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market.”

Immediately post the election in the period from 13th December to 9th January, enquiries to estate agents were up by 12% compared to the same period a year ago. This then led to a 7.1% increase in the number of sales agreed over the same period.

Post-election jump in buyer demand highest in London

Rightmove highlight initial signs of an uplift in buyer demand now the election is over with the biggest increase in London, according to new figures. *figures correct as of 19.02.20

In December demand across the UK from prospective buyers increased by 28% in the four days after the election (Friday 13 – Monday 16 December) compared to the same four days in 2018 (Friday 14 – Monday 17 December), with the biggest increase recorded in London, up 54% on the previous year.

Henry Knight, Managing Director of Springtide Capital said:

“These are encouraging signs for an active spring market in London. Figures suggest that the ‘wait-and-see’ buyers have been given a new confidence by the increased political certainty brought about the election and even though there will be further Brexit activity on the horizon, it is an encouraging start to 2020”.

Bristol is most popular place outside London for home hunters

Bristol has the accolade of the most searched for place outside of London for both buyers and renters in 2019, new Rightmove data has revealed.*figures correct as of 19.02.20

The average asking price of property in Bristol is £316,410, which is around £283,000 cheaper than in the capital, while homes for sale in Bristol spent an average of 50 days on the market before finding a buyer this year – selling quicker than anywhere else in the South West.

In London, the most searched for place for buyers was Wimbledon and for renters was Canary Wharf. In the capital, Hoxton in the London borough of Hackney has seen the biggest year-on-year increase in average asking prices, with average asking prices rising by 11.4% to £1,019,510 this year. Battersea in Wandsworth has seen the biggest increase in average asking rents, with prices rising by 14.1% over the past year to £2,544 per month.

At Springtide Capital we provide high quality impartial mortgage advice. We are a specialist mortgage broking business committed to providing a personal and efficient service. We understand the complexities of finding the right loan to suit both your financial and personal circumstance.

To speak to us today, call Springtide Capital on 020 3040 4400

Sources:

https://www.rightmove.co.uk/news/articles/property-news/post-election-bounce-as-optimism-returns/

https://www.rightmove.co.uk/news/articles/property-news/post-election-jump-in-buyer-demand-highest-in-london/

https://www.rightmove.co.uk/news/articles/dream-properties/bristol-is-most-popular-place-outside-london-for-home-hunters/

 

Good news for serious movers

Rightmove report that steadfast buyers are highly committed to getting a sale completed in the current market. The percentage of sales agreed that have fallen through this year is the lowest since 2015.

This is despite the number of sellers coming to market being down by 13.5% compared to this time last year. Sluggish prices and Brexit developments appear to put off some speculative sellers, but buyers remain undeterred as the number of sales agreed is virtually unchanged (-0.5%) on the same period a year ago.

Rightmove’s property expert Miles Shipside said: “In a strange Brexit-induced paradox, thousands of potential sellers are holding back compared to this time a year ago, though the number of buyers agreeing purchases is virtually the same. Ironically, this means that those who are coming to market have a better chance of selling, so while some would-be sellers are being put off, it’s actually a good time to sell.”

The ongoing uncertainty surrounding Brexit evidently continues to cause many sellers to hesitate and sit tight, however, there is a healthy level of sales still transacting.

Henry Knight, Managing Director of Springtide Capital commented:

“In such a price sensitive market, only the serious home buyers and sellers are deciding to take the plunge. With a reduced number of less committed parties, we have seen a reduction in the number of sales falling through, which is a definite positive to take from the current climate.”

UK yet to experience ‘Autumn bounce’

Rightmove’s data scientists have seen a smaller than usual Autumn price bounce (the annual increase in house prices between the slower summer and Christmas periods). The price of property coming to the market at this time of year usually experiences this Autumn bounce, with an average rise of 1.6% in the month of October over the last ten years. The price of property coming to market is seeing its lowest monthly rise at this time of year since October 2008, up by just 0.6% (+£1,942).

Nick Leeming, chairman of Jackson-Stops, said: ‘Although the UK is yet to experience an autumn bounce it doesn’t mean one isn’t on its way. The data shows that sales aren’t falling through as regularly as they have been, which suggests that the market is currently being driven by must-movers.’

London

Rightmove reports that there were 29.2% fewer new sellers than same period a year ago, deterred from trying to sell by continuing year-on-year price falls and short-term Brexit uncertainty. The number of sales agreed is up 0.8% on this time last year, indicating the commitment of serious movers in this market.

With buyer activity holding steady, it highlights that those who are buying are committed and focused on making transactions go through, a positive for those who have come to market and are serious about selling.

At Springtide Capital we provide high quality impartial mortgage advice. We are a specialist mortgage broking business committed to providing a personal and efficient service. We understand the complexities of finding the right loan to suit both your financial and personal circumstance.

To speak to us today, call Springtide Capital on 020 3040 4400

Sources:

https://www.rightmove.co.uk/news/content/uploads/2019/10/Rightmove-House-Price-Index-21-October-2019.pdf

https://www.thisismoney.co.uk/money/mortgageshome/article-7593637/With-Brexit-looming-really-good-time-sell-home.html

 

Gross mortgage lending for September 2019 stands at £22.3 billion

According to the latest Household Finance Update from UK Finance, Gross mortgage lending across the residential market in September 2019 was £22.3 billion, 3.7 per cent higher than in the same month in 2018.

  • There were 85,880 mortgages approved by the main high street banks in September 2019.
  • Mortgage approvals for home purchase were 13.5 per cent higher, remortgage approvals were 23.4 per cent higher.
  • Approvals for other secured borrowing were 8.5 per cent higher than in September 2018, which was a particularly subdued month for the mortgage market.

THE ECONOMY

  • The Office of National Statistics reported that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 7% in September 2019, unchanged from August 2019
  • The Consumer Prices Index (CPI) 12-month inflation rate was 1.7% in September 2019, unchanged from August 2019

HOUSING

Only minor changes month on month in the UK housing market according to Nationwide figures:

  • Annual house price growth dipped to 0.2% in September
  • Modest 0.2% price fall during the month, after taking account of seasonal factors
  • Annual price declines persist in London and the South East
  • Average Price (not seasonally adjusted) £215,352

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”

Support for reservation agreements

Chestertons estate agency have spoken out in favour of reservation agreements, supporting the latest initiative from the Ministry of Housing, Communities and Local Government, reveal Estate Agent Today.

“Property transactions fall through far too frequently and this is due to a wide range of factors, including changes in personal or financial circumstances, changes of heart and disagreements over specific terms of the deal. We hope the government takes steps to ensure that people who do have to pull out of a deal for reasons beyond their control are not penalised, although what constitutes a ‘good’ fall-through and a ‘bad’ one will no doubt be subject to a lot of debate.” says Guy Gittins, Chestertons’ managing director.

According to the Home Owners Alliance Survey more than 300,000 property transactions collapse every year due to broken chains and buyers changing their mind.

The MHCLG has said that a trial of reservation agreements will take place in the New Year, in two so-far unspecified regions of the country; the conveyancers and agents who will be involved have also not been selected yet, according to Estate Agent Today.

Mortgage Lenders and Administrators Statistics – 2019 Q2

The Mortgage Lenders and Administrators Return (MLAR) is a quarterly statistical release aggregated from data on mortgage lending activities provided by around 340 regulated mortgage lenders and administrators. Key findings released in September include:

  • The outstanding value of all residential mortgage loans was £1,461 billion in 2019 Q2, 3.1% higher than a year earlier.
  • The value of gross mortgage advances was £66.1 billion in 2019 Q2, 1.0% lower than a year ago.
  • The value of new mortgage commitments (lending agreed to be advanced in the coming months) was broadly unchanged compared to a year earlier, at £73.4 billion.
  • The share of mortgages advanced in Q2 with loan to value (LTV) ratios exceeding 90% was 5.5%, the highest since 2008 Q4.
  • The share of gross mortgage lending for buy-to-let purposes (covering house purchase, remortgage and further advance) was 13.1%, in line with a year earlier.
  • Lending to owner-occupiers for house purchase accounted for 50.5% of total gross mortgage advances in Q2. Of this, 21.3% was to first-time buyers, which is consistent with a year earlier. The share of lending to home movers increased marginally in the year to 29.2%.

Sources:

https://www.ukfinance.org.uk/data-and-research/data/household-finance/household-lending-and-deposits

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Sep_Q3_2019.pdf

https://www.estateagenttoday.co.uk/breaking-news/2019/10/another-agency-backs-reservation-agreements-to-cut-fall-throughs

https://hoa.org.uk/2018/05/selling-pain-points/

https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2019/2019-q2

Gross mortgage lending for July 2019 stands at £26.1bn

According to the latest Household Finance Update from UK Finance, Gross mortgage lending across the residential market in July 2019 was £26.1bn, 4.0 per cent lower than the same month in 2018.

  • This is 2.9 per cent higher than the same month in 2018 and the highest since March 2016.
  • There were 95,126 mortgages approved by the main high street banks in July 2019, the highest monthly total since July 2009 when the figure stood at 99,970.
  • Mortgage approvals for home purchase were 16.4 per cent higher, remortgage approvals were 19.4 per cent higher.

THE ECONOMY

  • The Office of National Statistics reported the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.0% in July 2019, increasing from 1.9% in June 2019.
  • The Consumer Prices Index (CPI) 12-month rate was 2.1% in July 2019, increasing from 2.0% in June 2019

HOUSING

The Nationwide reported the following for July:

  • Slight slowing in the rate of annual house price growth to 0.3%
  • Modest 0.3% month-on-month rise, after taking account of seasonal factors
  • Average Price (not seasonally adjusted) £217,663

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“Annual house price growth remained below 1% for the eighth month in a row in July, at 0.3%. While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months. “Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable”

The Bank of England highlighted the fact that mortgage market activity has remained stable. Mortgage approvals for house purchase being at their highest level since July 2017. Net mortgage lending rose in July to £4.6 billion. Mortgage approvals for house purchase (an indicator for future lending) increased in July to 67,300.

Henry Knight, Managing Director from Springtide Capital commented:

“The July figures from UK Finance are the most encouraging for a while. The mortgage approvals figure was positive and we expect to see first-time buyer numbers continuing to increase across the whole country, including London”

At Springtide Capital we provide high quality impartial mortgage advice. We are a specialist mortgage broking business committed to providing a personal and efficient service. We understand the complexities of finding the right loan to suit both your financial and personal circumstance.

To speak to us today, call Springtide Capital on 020 3040 4400

Sources:

https://www.ukfinance.org.uk/data-and-research/data/household-finance/household-lending-and-deposits

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/july2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Jul_2019.pdf

https://www.bankofengland.co.uk/statistics/money-and-credit/2019/july-2019

Changing attitudes towards lending and property in later life

With the UK’s population living longer, attitudes regarding property and financial planning are changing across the UK. Statistics and projections produced by Office for National Statistics (ONS) show that the UK’s population is ageing. The ONS states that in 50 years’ time, there are likely to be an additional 8.6 million people aged 65 years and over residing in the UK.

Research by the The Equity Release Council, titled ‘Beyond bricks and mortar: the changing role of property in later life financial plans’ states that 51% of older homeowners are now factoring their homes into their later life plans. A further 44% feel taking out a mortgage or loan to access property wealth in later life is becoming a more common way to manage money, while 40% see it as a “reality” of ageing. The Equity Release Council represent the equity release sector and their aim is to promote high standards of conduct and practice in the provision of and advice on equity release. David Burrowes, their Chairman, states:

‘While the ‘home for life’ mentality persists, our findings suggest people are increasingly thinking of property as a multipurpose financial asset – particularly those aged 45-64 who represent the retirees of tomorrow. There are also signs of willingness to use housing assets during their lifetimes through loan-based products, with resistance driven by practical barriers rather than entrenched views about the traditional roles of property.’

Exploring an untapped resource

Home improvements, supplementing your retirement income or providing financial support for family are some of the reasons people consider equity release in later life.

The report states that property largely remains an untapped resource during many people’s lifetimes, despite their awareness of its potential. Only 4% of over-65 homeowners say they have used property wealth to support themselves in the last year, while 3% have used it to support friends or family.

Henry Knight, MD from Springtide Capital Comments:

‘The retirees of tomorrow increasingly plan to use money invested in property as a ‘nest egg’ for unexpected expenses or to help family members while they are still alive. The UK continues to develop a successful strategy to balance the financial needs of old and young and property has a central role to play. In the financial services industry, the Later Life lending proposition is evolving including improvements in product innovation, consumer education and communication.”

Practicalities

The report shows a growing acceptance among homeowners to view bricks and mortar as a way to support multiple financial goals during their lifetimes. This is particularly evident among those aged 45-64, who are motivated by the potential to help themselves and younger generations.

The most common perceived barrier that older consumers identify when considering a mortgage, loan or financial product as a route to access property wealth in their lifetimes all relate to practical considerations, such as decision-making, cost, flexibility, inheritance plans and financial education.

While the report highlights there is significant intent to use – or at the very least consider – residential property as part of later life planning, current activity suggests more needs to be done to encourage people to take proactive steps. The Council has called for action spanning consumers and their families, industry, regulators and government, to support financial education, product development, consumer safeguards and policy planning. This includes establishing a cross-party Later Life Commission and a dedicated Minister for the Elderly.

At Springtide Capital we are able to deliver solutions tailored to your personal situation, please contact us and one of our qualified specialists will be able to provide you with a personalised illustration.

To speak to us today, call Springtide Capital on 020 3040 4400 to book an appointment.

Sources:

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/livinglongerhowourpopulationischangingandwhyitmatters/2018-08-13

https://www.equityreleasecouncil.com/about/

https://www.equityreleasecouncil.com/documents/beyond-bricks-and-mortar-the-changing-role-of-property-in-later-life-financial-plans/

Gross mortgage lending for June 2019

Gross mortgage lending for June 2019 stands at £21.9bn

According to the Household Finance Update from UK Finance, Gross mortgage lending across the residential market in June 2019 was £21.9bn, 4.0 per cent lower than the same month in 2018.

  • The number of mortgages for home purchase approved by the main high street banks in June 2019 was 2.9 per cent higher than in the same month in 2018.
  • Remortgage approvals were 1.4 per cent lower and approvals for other secured borrowing were 5.3 per cent lower than the same month a year earlier.

MORTGAGES

Mortgage Lending Trends

  • There were 32,760 new first-time buyer mortgages completed in June 2019, 1.5 per cent fewer than in the same month in 2018. There were 31,000 home mover mortgages completed in June 2019, 3.6 per cent fewer than in the same month a year earlier.
  • There were 16,880 new remortgages with additional borrowing in June 2019, 8.3 per cent more than in the same month in 2018.
  • There were 5,300 new buy-to-let home purchase mortgages completed in June 2019, 3.6 per cent fewer than this time last year. There were 12,500 remortgages in the buy-to-let sector, 0.8 per cent fewer than the same month in 2018.

Positive Broker Influence

In the LMS Monthly Remortgage Snapshot, it is reported that 67% of borrowers picked a remortgage product because it had been recommended by a broker. This positive figure reflects the importance of brokers in the modern remortgage market and highlights the value of qualified advice.

Henry Knight, Managing Director of Springtide Capital commented:

“In using a mortgage broker, you will receive an expert opinion on which is the best mortgage for you in terms of the interest rate and the likelihood of your application being accepted. This expertise will save significant time and offers an in depth understanding of the whole market”

UK Finance released their Annual ranking of mortgage lenders by outstanding balances and gross lending

THE ECONOMY

  • The Office of National Statistics reported that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 1.9% in June 2019, unchanged from May 2019.
  • The Consumer Prices Index (CPI) 12-month rate was 2.0% in June 2019, unchanged from May 2019.

HOUSING

Only minor changes month on month in the UK housing market according to Nationwide figures: 

  • Annual house price growth remained subdued at 0.5% in June
  • Modest 0.1% price rise during the month, after taking account of seasonal factors.
  • Annual price falls persist in London and the South East
  • Average Price (not seasonally adjusted) £216,515

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. Nevertheless, indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable”

Sources:

https://www.ukfinance.org.uk/sites/default/files/uploads/Data%20(XLS%20and%20PDF)/Household-Finance-Update-June-2019.pdf

https://www.ukfinance.org.uk/data-and-research/data/mortgages/lending-trends

https://corporate.lms.com/app/uploads/2019/08/LMS-June-Snapshot-2019.pdf

https://www.ukfinance.org.uk/data-and-research/data/mortgages/largest-mortgage-lenders

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/june2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Jun_Q2_2019.pdf

 

Do I need a Mortgage Broker?

Mortgage advice from a reputable, independent broker can be an invaluable part of the mortgage process and can offer a wealth of experience, here’s how….

Before offering you advice, mortgage brokers have to go through a lengthy training process to become qualified and will build up a wealth of professional knowledge over that time.

A mortgage broker can offer you unbiased advice from a wide range of lenders and subsequent mortgage products, trying to secure the best deal to suit your needs.

Which? analysis has found more than four in ten mortgages are broker-only, meaning you’re unlikely to find them on comparison sites. For the purchase of a buy-to-let property, the proportion of broker-only deals rises to almost two-thirds. The use of brokers in the buy-to-let market may be having a significant effect on the number of applications that result in an offer. Data from the Intermediary Mortgage Lenders association shows that 89% of buy-to-let applications are successful.

The application process for a mortgage can differ from lender to lender so having a Mortgage Broker who is familiar with the varying processes is an advantage. Making your application through a mortgage broker should save you time also, due to the fact that your broker should have used their expert knowledge of criteria to mitigate any potential risks and match you to the most suitable lender. Some low rates may have hidden fees or may not be entirely suitable for your circumstances so using the services of a mortgage broker with expert knowledge should help you to avoid these pitfalls. Don’t be put off by the ‘middleman’ aspect of the mortgage broker.

Applying direct may suit some borrowers, but if you are looking for a helping hand to guide you through the mortgage process, then using a broker has many advantages.

Henry Knight at Springtide Capital highlights:

“In using a mortgage broker, you will receive an expert opinion on which is the best mortgage for you in terms of the interest rate and the likelihood of your application being accepted. This expertise will save significant time and by having an in depth understanding of the whole market, a broker is able to add value by advising on what is and isn’t possible from the outset.”

Springtide Capital look to assist borrowers in obtaining competitive, bespoke mortgage solutions often on exclusive terms for the following:

We also provide personal and property protection advice.

To speak to us today, call Springtide Capital on 020 3040 4400 to book an appointment with a mortgage consultant.

Sources:

https://www.which.co.uk/news/2019/06/could-you-get-a-better-mortgage-rate-by-using-a-broker/

http://springtidecapital.com/

Gross mortgage lending for May 2019 stands at £21.9bn

According to the latest Household Finance Update from UK Finance, Gross mortgage lending across the residential market in May 2019 was £21.9bn, 0.4 per cent lower than the same month in 2018.

  • The number of mortgages for home purchase approved by the main high street banks in May 2019 was 9.1 per cent higher than in the same month in 2018, reaching its highest level since June 2016.
  • Remortgage approvals were 3.7 per cent lower and approvals for other secured borrowing were 5.9 per cent higher than the same month a year earlier.

THE ECONOMY

  • The Office of National Statistics reported that Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 1.9% in May 2019, down from 2.0% in April 2019.
  • The Consumer Prices Index (CPI) 12-month rate was 2.0% in May 2019, down from 2.1% in April 2019.

HOUSING

Only minor changes month on month in the UK housing market according to Nationwide figures:

  • Annual house price growth slowed to 0.6%
  • Prices fall 0.2% month-on-month, after taking account of seasonal factors
  • Average Price (not seasonally adjusted) £214,946

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“Housing market trends are likely to continue to mirror developments in the broader economy. While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months”

Henry Knight, Managing Director of Springtide Capital commented:

“Mortgage lending proved resilient in May. Remortgage activity and first-time buyers continue to drive lending so far in 2019. Looking ahead, this trend is likely to continue, but the level of this will depend heavily on the economy.”

Mortgage Lenders and Administrators Statistics – 2019 Q1

The Mortgage Lenders and Administrators Return (MLAR) is a quarterly statistical release aggregated from data on mortgage lending activities provided by around 340 regulated mortgage lenders and administrators. Their Q1 findings include:

  • The outstanding value of all residential mortgage loans was £1,451 billion in 2019 Q1, 3.4% higher than a year earlier.
  • The value of gross mortgage advances was £63.3 billion in 2019 Q1, 1.4% higher than a year ago
  • The value of new mortgage commitments (lending agreed to be advanced in the coming months) was £63.8 billion, 4.5% higher than a year earlier.
  • The share of mortgage loans with loan to value (LTV) ratios exceeding 90% increased to 4.5% in 2019 Q1, compared to 3.3% a year earlier. This is its highest since 2017 Q2.
  • The proportion of high loan to income (LTI) lending (loans greater than four times the value of annual income for a single buyer or greater than three times the annual income for joint buyers) was 45.0% in Q1, 0.8 percentage points (pp) higher than a year earlier.
  • The share of lending for buy to let (BTL) purposes (including house purchase, remortgage and further advance) was 14.0% in 2019 Q1, marginally lower than a year earlier.
  • Lending to owner occupiers for house purchase accounted for 46.1% of total gross mortgage advances. Of this, 19.2% was to first-time buyers, which is consistent with a year earlier. The share of lending to home movers decreased marginally in the year to 26.9%.

Sources:

https://www.ukfinance.org.uk/data-and-research/data/household-finance/household-lending-and-deposits

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2019

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/May_2019.pdf

https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2019/2019-q1