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A matter of trust

On the face of it, the mortgage intermediary&#39s 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&#39s superior knowledge and


The mortgage adviser&#39s 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&#39s 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&#39s data is only available to subscribers, any

information older than one month is readily available on the information

centre section of

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

near future.

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&#39s house price index can be found at (under

the Economic View section) and the address of Nationwide&#39s 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

per cent.

In the second quarter, according to the Land Registry (website, the first quarter&#39s 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

least 2006.

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:

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

information invaluable.

Jim Washington

Director of credit,



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