We have calculated that we need to see 12 per cent more people to get the same number of mortgage appointments as in Q1 2012. Activity is the key and the watchword.
As predicted, the lenders aren’t dripping much of that £80bn Funding for Lending into mortgages.
And frankly, why would they without any meaningful targets to hold them to account?
With no targets or criteria to ring fence the funding for first-time buyers, the only people gaining are landlords and homeowners.
The latest figures from the British Bankers’ Association highlight the extent of the shortfall in overall lending with figures 17 per cent down on July last year.
In fact, data from Moneyfacts shows an actual increase in the average cost of two year mortgages requiring a 10 per cent deposit since the Funding for Lending scheme was launched in August.
Concerns are now being raised by industry commentators and the likes of the Association of Mortgage Intermediaries to say that the scheme could distort the market.
The scheme is attracting criticism for two key reasons – firstly because some reports suggest that the products enjoying the biggest price reductions like buy-to-let could create an influx of renters and partly because the funds aren’t being made available to smaller lenders.
While it is encouraging to see remortgage offers reach a point where it is increasingly more cost effective for homeowners to take the plunge, we can only hope that the improved terms for 60 per cent LTV products feed into the 75 per cent bracket and then 85 per cent before finally reaching the holy grail of 90 per cent LTV offerings.
Overall, with the summer almost behind us, I’m more confident that we have reached the bottom and that we are able to move forward into Q4 with more enthusiasm.
I’m also hoping that Q4 will mark the first time that we’ve had a full house with Halifax, RBS, NatWest, Nationwide, Barclays and Santander all competing for business – wouldn’t that be a nice way to finish the year and move into Q1 2013 with a pipeline?
I really can’t see 2013 being bigger than 2011 gross lending though as I still think 2012 will turn out £130-135bn, some £5-10bn down year-on-year and best case is we get that back in 2013. Funding for Lending could undoubtedly makes that more likely – so that’s encouraging.
Also, the mutual sector is definitely feeling more confident. Nationwide are our biggest supporter this year thus far and we are looking to work even more closely with the likes of the Leeds, Coventry and Yorkshire.
I’ve banged on about it all year but the two sectors to watch are new homes and buy-to-let with the latter proving to be resilient – although I still worry about our reliance on The Mortgage Works and BM Solutions.
Without the continued support of these two fine lenders we would be running around trying to replace borrowing and probably not too successfully.
I’m also getting more encouraged by Woolwich and Virgin Money’s stance in this sector – the more the better. New homes have untapped potential and is getting more active so we are investing a lot in this sector with dedicated new build mortgage advisors and also supporting Mortgage Intelligence to expand its presence in this key growth market.
Despite this renewed sense of optimism within the industry, there’s a growing sense of pessimism in the public domain as the majority of 25-35 year olds simply do not believe mortgage finance is available.
With that in mind, I’d like to see some industry-wide initiatives to get people believing they can move out of their parents or private rented and into a house of their own. I think because we are in the industry we can lose sight of how the British public is thinking about mortgage finance availability.
It’s pretty simple in my recent experience – they don’t think they can get it.
Education is key, be it through advertising and personal advice to push the message that there are options through conventional mortgages, FirstBuy, NewBuy and a variety of assisted schemes. What about a fund from all lenders to contribute? I fear I’m wasting my breath and that competition will stifle this.
So in the haze of golden glory I’m more optimistic than I’ve been for a while – I still think this half year will be challenging but the bottom may have been reached and I’m looking forward to Q4.