I am delighted to be back at the keyboard for Money Marketing after a spell in the garden! I’m refreshed and independent as I no longer sit in the distribution space having joined the largest conveyancer in the UK.
However, the invitation to talk about my first love mortgages was a temptation I could not resist.
There have been plenty of bullish statements made about 2013 but so soon after the lending collapse, could anyone imagine we would be talking about a potential over supply of lender money being available for mortgages? That is exactly what a number of lenders are concerned about.
It has been well documented that the Funding for Lending scheme has given real impetus to the market and provided an incredibly important boost. This together with positive net retail receipts that many banks and building societies are reporting, has meant lenders have money to lend even after taking into account the tighter liquidity and regulatory requirements.
One may ask, isn’t the answer simply to loosen criteria which will help the market as well as the bankers much needed positive PR?
Well, this gets to the heart of why some of the lending community have demand side concerns.
Firstly, we need to remember that it was not that long ago when lenders were berated for loose criteria which fuelled the market collapse so it is unlikely that the credit risk departments are going to roll over on this.
Secondly, a number of lenders have been involved in securitisation deals and you can rest assured that the part of the book that was sold was AAA rated with solid credit scores, payment history, low LTV’s etc. This will have impacted on the back book they are holding so high LTV, scorecard and credit loosening will impede the quality of their total book further.
However, there is plenty of good news for intermediaries but you have to take responsibility to make your clients aware. The message must get across that lenders are lending and if anyone had not noticed there is a price war going on!
With a number of lenders increasing SVR’s last year there is an excellent remortgage opportunity, especially when fixed rate cessation peaks occur and five year fixes are at historic lows.
More lenders including the likes of Precise are entering the packaged remortgage deals with free valuations and legals which support this further.
Product innovation has been kick started with the likes of Barclays launching an excellent version of a parent’s guarantor mortgage and Clydesdale’s low start mortgage with the first three years on interest only. Oh, and watch this space as we could be seeing a few new lenders this year as well.
And when you shout about it, remember to tell your clients that with product proliferation, innovation, intermediary only lenders and access to whole of market etc there is only one place for them to discuss their mortgage needs – their intermediary.
I have run out of space and have not even managed to get onto the subject of MMR. It’s good to be back. It is essential that you keep shouting about the good news.
Dev Malle is group sales director at myhomemove