View more on these topics

AVS not all it’s cracked up to be

Earlier this month the Council of Mortgage Lenders held its mortgage arrears and repossessions conference. Along with interest-only, one of the key topics for debate was assisted voluntary sales.

AVSs are not a new idea and essentially allow some borrowers to get support from their lender to sell their property and avoid possession.

But as Connells Asset Management’s operations director Teresa Scales describes in this week’s Lending Zone on p29, AVSs are not the ideal solution sometimes portrayed by lenders, with schemes prone to problems and challenges mainly with the ongoing housing needs of the borrower.

As a result, she says, the take-up among borrowers has been low. Some lenders have talked of large percentage increases in the borrowers using AVS, but sceptics point out that with precise figures rarely illustrating the headline percentage increases, it’s likely that any spike upwards has been from a low base.

Scales’ company Connells portrayed a potential solution and it will be interesting to see what effect it has on the wider market.

Meanwhile, in our main cover story on p26 Edmund Tirbutt looks at the impact new entrants have had on the market.

Not much, is probably the instinctive reaction from most people in the market. But the so-called challenger banks have had a tough situation on their hands. With wholesale markets closed and new investment scarce, new lenders have had to work from the bottom up.

Aldermore Bank has had a strong stab at it and has recently launched a range of NewBuy products – in which only the top five largest lenders have so far shown any interest.

But ultimately it seems that, with the stagnant state of the market, any growth from new entrants will be slow.

As Precise Mortgages’ managing director Alan Cleary puts it, with some of the larger lenders having been in existence for hundreds of years, anyone who thinks that the new entrants will change the status quo is going to be disappointed.

Recommended

Inflation could near double digits

Jupiter Asset Management chief investment officer John Chatfeild-Roberts has warned inflation could near double digits over the next five years and be the “achilles heel” of the UK economy. The UK consumer prices index fell to 2.5 per cent per cent in August, down 0.1 per cent compared to July. However, Chatfeild-Roberts warns the current […]

3

Advertising watchdog bans payday lender ad

The Advertising Standards Authority has banned an advert by payday lender Instant Cash Loans, trading as the Money Shop, following a complaint from a viewer that the APR rate was not “sufficiently prominent”. Two complaints were levelled against a TV ad for the firm where a translucent box stated “Representative example: £100 for only £10 […]

stoclet

Bolder housing policy required

We have all read reams about the paucity of available mortgage financing and tight credit conditions pushing average age of first-time buyers to 35, from 24 in the sixties. In the go-go years leading up to 2007, cheap money and loose credit allowed just about anyone to live the dream. Along came the crisis and […]

scales

Easing the path to re-housing

Assisted Voluntary Sales schemes should, in theory, present a more attractive option for borrowers who have fallen into arrears on their mortgage.

Abe and Modi

Investment ideas to power returns

We believe the most exciting stockmarket opportunities today are in those places where a new generation of leaders are successfully transforming economies and companies in favour of investors. In a new investment guide and website, which is suitable for use with your clients, we set out our views on these reformers. Click here to find […]

Newsletter

News and expert analysis straight to your inbox

Sign up