As a salesperson, I like to stay positive but we also need to underpin this with evidence from time to time. Is there any?
Well, despite both the Nationwide and Halifax property indices confirming a further fall in house prices in February, we did see Rightmove revealing a 0.9 per cent increase in the marketed price of properties. There is a gap between buyer and seller expectations but it may well be the level of supply that will ultimately govern which player is being more realistic. Moreover, there is a feeling that we are nearing, or even at, the bottom.
This is particularly important as it will give lenders confidence to lend at higher loan to value ratios. Guess what? We have seen the key lenders finally starting to push the LTV boundaries from 60 per cent to 75 per cent and now to 85 per cent with some great headline rates and fixes that even customers on low standard variable rates will want to consider.
At the time of writing, rates include a 3.79 per cent two-year fix at 75 per cent and news that a major lender is coming into the market with an aggressively priced offset product and reducing rates on the 85 per cent LTV product.
Under the Government’s asset protection scheme, lenders such as Royal Bank of Scotland and Lloyds Banking Group have promised additional mortgage lending this year of £9bn and £3bn respectively, which will boost the Council of Mortgage Lenders’ forecasts for gross lending by 8 per cent.
Other initiatives, which are now being given more structure, include affordable housing initiatives and shared-equity schemes.
Finally, last week, Nadleem Walayat, a respected American analyst who is renowned for his conservative, some would say pessimistic, view on the market, indicated that we have reached the point where we can be more bullish on stocks. He goes on to explain that “inflation, zero interest rates (forcing savers/financial institutions to take risks) quantitative easing (money printing) and huge fiscal stimulus packages are laying all of the groundwork for the next bubble, regardless of how bad things appear, as any outcome that prevents another Great Depression will be seen as bullish.”
He goes on to say: “The governments have learned the lessons from the Great Depression and will succeed in inflating the asset prices and ignite the next perhaps even bigger bubble, mean- while the stealth bull market will continue, which, by the time everyone realises what’s going on stocks, will already be up by perhaps more than 50 per cent from the low”.
Please don’t think I am predicting an overnight recovery. One that evolves over the coming years would be more realistic. But if equities are the first sign of recovery, then maybe this is a stronger indicator than any other that salespeople can start to be positive again.
Dev Malle is group sales director at Personal Touch Financial Services