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Stuart Gregory: Progressing to the year of the remortgage

If 2013 has been a year of progression, 2014 could be the year of the remortgage.

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It seems odd to think that 2013 is almost over – how these months have flown by! It has felt like a year of progression, with Funding for Lending leading the way in the increase of competition between lenders.

Help to Buy was launched – well, stage one anyway. Stage two was….launched. Then, not really. Not until January at least. while some lenders do the sensible thing and get their ’systems’ in place before the original planned launch date. Those that did launch saw an influx of enquiries.

Online I’ve seen many comments from other brokers about difficulty in getting 95 per cent loans approved on the scheme – is this down to client circumstances, or tweaks behind the scenes I wonder?

I’m still in the ‘not sure’ camp regarding the scheme overall – yes it has benefitted the new build housing market, but there may be a limit to that benefit. You’ve probably heard the same information as I have – new build developments placed on hold while they wait for more materials to be available. This is an issue caused by increasing confidence and desire from buyers – probably from the Help to Buy scheme.

It does leave you wondering whether the Government departments actually thought about the impact on the housing suppliers – some of which who are now waiting 14 weeks for bricks…and bathroom suites. You couldn’t make it up could you?

Housing is an industry waking from its recession-led slumber – instead of waking it up slowly and lovingly with a cup of tea in bed, Mr Cameron et al have used the bucket of cold water option.
Which is fine – but you may not get the reaction you’d hoped for.

So, demand for housing is up – beware of bubbles? Well, in London apparently. Recent Land Registry statistics showed that year on year, prices had risen only 1.3 per cent in England & Wales, whilst rising over 7 per cent in London. What we’re seeing now are ‘supply and demand’ issues. Improved underwriting procedures and the forthcoming Mortgage Market Review will ensure that lending doesn’t get carried away. Outside influences like cash buyers can of course skew prices as buyers fight over properties.

As we look ahead to 2014 I see it as potentially the year of the remortgage – as many borrowers consider their options. It certainly could be a year of opportunity, as we enter the potential final year of the Funding for Lending Scheme. If someone would have predicted that we’d see five- year fixed rates under 3 per cent two years ago, we may have laughed. Here’s to more smiling faces in 2014 – we’ve worked hard for it.

Stuart Gregory is managing director of Lentune Mortgage Consultancy

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