On the face of it, the mortgage intermediary's job looks pretty
straightforward. Is it not simply a matter of finding the right mortgage
product for clients, taking account of their circumstances and individual
needs? Not quite.
Because, as every success-ful adviser knows, the job consists of more than
just acting as a channel for mortgage applications.
At the real core of success lies the development of a strong, trusting
relationship with clients based on an adviser's superior knowledge and
The mortgage adviser's first concern is, admittedly, finding their clients
the correct mortgage while always bearing in mind the duty to advise them
on “responsible” borrowing.
However, the clients themselves will have a whole raft of additional
concerns on their minds, not least of which will be the state of the
housing and property markets in their own area.
This will have a great bearing on what sort of property they can afford
and, more important, how much they need to borrow to get the property they
So, even though this subject may seem to be the estate agent's territory,
intermediaries would be well advised to keep up with the latest property
and housing market information so that they can build up trusting and
fruitful relationships with clients.
However, keeping a watch on the housing market can prove to be a confusing
business as sources of information will often report increased activity in
different areas of the market. Having acknowledged this anomaly, it is
usually only necessary for advisers to concentrate on their own region as
most clients will be consulting an adviser based in the area they are
looking to buy their property.
One good information source on the regional housing market is the Royal
Institution of Chartered Surveyors which produces a monthly market report
based on the experience of its members, who are ideally placed to give an
accurate view of how house prices are rising and falling and the briskness
of the property sale and purchase market.
Although the current mon-th's data is only available to subscribers, any
information older than one month is readily available on the information
centre section of www.ricsonline.org.
The latest of these market surveys is very optimistic and reports
sustained house price growth as falling mortgage rates further stoke up an
already firm housing market on the back of continued employment growth and
rob-ust wage rises.
This survey shows house price rises leading the way in the North-west,
Yorkshire and Humberside and the North. However, falling interest rates are
expected to boost prices once again in London and the South-east in the
Two major high-street len-ders also record current and historical house
prices based on their own lending experience and make this information
available to the public.
Halifax's house price index can be found at www.halifaxgroupplc.com (under
the Economic View section) and the address of Nationwide's index is
However, the most comprehensive view on price movements is given in the
statistics compiled by the Land Registry which records all property
transactions that are registered in England and Wales.
The latest figures for April to June 2001 (similar to the RICS survey)
show Yorkshire and Humberside with the highest price rise over the previous
quarter at 10 per cent. The lowest overall rise is shown in London at 4.75
In the second quarter, according to the Land Registry (website
www.landreg.gov.UK), the first quarter's downward price trend was reversed,
with quarter-on-quarter rises in all regions (apart from Greater London)
being between 6 per cent and 10 per cent.
Comparisons with the second quarter 2000 show even greater rises, with
many reg-ions above 11 per cent, alth-ough the number of transactions has
fallen in the majority of regions by more than 10 per cent. However, with
house purchases accounting for only around half the mortgage market,
stagnating sales are not a major threat to intermediary business, as rising
property values create favourable conditions for growth in remortgage
Overall regional figures can be an oversimplification as differences
between “sought after” and “unfashionable” areas of the same town or
reg-ion can be significant.
Just taking the highest and lowest average prices in London shows the
disparities that can exist, with the highest average property price at
£566,000 in Kensington and Chelsea and the lowest at £91,000 in
Barking and Dagenham.
Within both ends of the price scale, there are variances in price
movements. For example, at the cheaper end, Barking and Dagenham prices are
up by around 7.5 per cent since the first quarter of 2001 but at the top
end, Kensington prices are down by 0.9 per cent over the same period.
It is not just prices that affect the market. Housing provision is a major
concern of the Government and the Government offices for all UK regions
formulate regional planning guidance, which includes homes and new building.
Regional planning guidance has already been published for most regions,
often setting out targets for housing growth. Annual targets have been set
at 23,000 new homes in London each year from 2001 to 2006 and 39,000 new
homes a year in the rest of the South-east over the same period.
The East Midlands is planning for 13,900 new households a year over the
next 20 years and East Anglia an extra 9,900 households each year until at
In the North-east, additional housing over the next 15 years is estimated
at around 90,000 dwellings. All this will add up to considerable extra
potential in the house purchase/mortgage industry.
Advisers who are interested can access information via links in the
following website: www.info4local.gov.UK.
In these regulatory times, when the service provided by mortgage advisers
is coming under ever greater scrutiny, those wanting to expand their
knowledge of the wider market conditions – and provide that all-important
added value to their customers – will find these public sources of market
Director of credit,