The announcement last week that Precise Mortgages had gained authorisation was great news for the market. As one of the first new mortgage firms to officially gain authorisation from the Financial Services Authority for residential mortgages, with its backing from US equity firm Elliot Associates it will hopefully inject some much-needed competition back into the market.
It won’t provide the billions the market needs to get itself back on track, but it’s a start.
Whether there will be any other new entrants this year is looking doubtful.
Despite the likes of Portillion and The Home & Savings Bank both announcing that they were setting up new lenders, there has been no word yet on when they are likely to launch. Fingers crossed it will be soon.
Nationwide’s latest property index for October painted a gloomy picture, with the average property price falling marginally in October to £164,381 down from £166,757 in September. There was a similar pattern in the Bank of England’s lending to individuals statistics, which showed that there were 47,498 mortgage approvals in August and 47,474 in September.
August is the month when everyone relaxes on their summer break, so you’d expect activity to be low. But the fact things got worse in September, albeit fractionally, is an ominous sign.
With Countrywide revealing at the start of last week that the demand for rental accommodation had jumped by 44% this year, with 61,000 new tenants registering for rental accommodation, it’s clear to see the effect criteria restrictions are having on the mortgage market.
So Precise’s authorisation last week was encouraging. But to badly paraphrase Charles Dickens’ starving Oliver – more please, FSA.