Regions outside the South-east need a boost
Last month a reader suggested another housing crash was needed because properties are still overvalued, particularly n the South East and London. It seems they are unaware of how dire the housing market is in other regions, and how much an interest rate rise or any other cooling measures could damage the frail recovery.
Here in the North East, for example, according to latest Land Registry figures house prices are 23 per cent below their peak of October 2007. In April of this year, a Countrywide survey examined the number of first-time buyers who bought a new home in 2007 and are still in negative equity. Nationally the figure is 6 per cent but in the North East it is 53 per cent, and the rate of decline in negative equity is only 3 per cent a year.
In consequence, the ability of buyers to move along the housing chain is being stifled and in some areas the housing market is dysfunctional. Properties in some of the less popular areas have been snapped up for peanuts by speculators and ‘Benefit Street’ type enclaves created.
The building of new homes has also had a negative impact. Often, the only way for a first-time buyer to get onto the housing ladder is via a government scheme operated by a builder. They invariably find they are trapped into the scheme as well as being in negative equity. For existing homeowners wishing to move, the difficulty in selling their home forces them into a builder’s part exchange scheme, with the result that their old home is dumped on to the second hand market to compete with similar houses which cannot sell, resulting in falling house prices.
So from our perspective, the recovery needs to run much longer before cooling measures are introduced, or the Government needs to take positive steps to boost the regions outside the south east.
RS Mortgage Consultancy
What now for BDMs post-MMR?
I read an interesting article in Mortgage Strategy last month in which it asked what will future role of BDMs be in the post-MMR world.
Our relationships with our BDMs are hugely important. The best educate and facilitate. We would certainly not do the levels of business we do with our top lenders, if it were not for the BDMs.
They get grief when a case goes wrong, and are certainly not praised or thanked anywhere near enough when things go right. They have a thankless task with many Brokers. I would not do their job for all the tea in China. I would tell brokers to do one and learn how to do their job properly before criticising me for mine.
Name and address supplied
Why regulate the buy-to-let market?
Buy-to-let experts recently predicted full regulation of the sector is on the horizon after the Government’s shock move to regulate “accidental landlords” to comply with the EU’s mortgage credit directive.
I accept why cases involving so-called “accidental landlords” should be regulated but I do not think regulation of buy-to-let is necessary. If you buy something with the express purpose of renting it out, you are not a consumer, you are a business. That applies whatever the commodity is – car, computer, boat or a house.
And if you are not a consumer, then protection should not apply to you.
A fairer way for broker’s proc fees
I agree with the panel at the Financial Services Expo that proc fees should be higher but this should not cloud a broker’s judgement when advising their clients. We have to ensure that we are seen to do the best job for them, basing advice on their individual circumstances and not on who may offer more money for using their products. (I am not saying people would, but, let’s remove temptation).
It would be nice to see lenders reward the hard work that brokers do on their behalf to get them business with proc levels that reflect these efforts. And let’s not forget, in the majority of cases, not all of the proc fee goes to the actual broker, a good proportion goes to network fees etc. So whilst the individual broker workload may have increased they may not be getting all of the reward.