The year may be only days old but, in the mortgage market at least, we have already seen some themes emerging that should make for an interesting and, hopefully, profitable 12 months for advisers.
Last week, I saw the first use of the phrase ‘rate war’ in relation to the price cuts already announced by lenders. It appears the focus is still on low-LTV pricing and, for borrowers fortunate enough to have 40 per cent equity/deposits, there are some highly competitive deals available.
Barclays is the latest to make a splash with its 2.99 per cent 10-year fix, clearly trying to tempt those who want long-term certainty and do not wish to have their payments fluctuating as rates rise.
There have also been lenders moving two-year fixes from the start of the year and cutting tracker prices. ‘Rate war’ may be an exaggeration but the pressure on pricing remains downwards and we should expect more lenders to move in the same direction.
Further increases in proc fees have been announced by some lenders, of which the latest is Leeds Building Society. Again, this shows the greater importance placed on securing intermediary business and the fact that the intermediary share of the market is likely to grow. Lenders are acutely aware of this and, for those who have been behind in terms of their proc fees, now is the time to play catch-up.
All in all, the mortgage market has kicked off very promisingly for advisers and we are likely to see a far more intermediary-focused lending community over the next 12 months and beyond.