Mortgage market review October 2017 part 2
MACRO NEWS AND DRIVERS
Lazy lenders are costing mortgage borrowers £1.6 billion every year
Mortgage borrowers are missing out on potential savings of nearly £1.6 billion every year as a result of lenders failing to contact them when their fixed rate deal ends, new research has revealed.
Buy-to-let lending remains in the doldrums
There was a surge in first-time buyer and home mover activity in September, although the picture for buy-to-let is looking less rosy, new figures show. According to figures from UK Finance, 34,400 first-time buyers took out loans worth £5.7 billion last month – 14% up on the preceding month and 9% more than a year ago.
North-South property divide upended
The traditional north-south property divide has been upended as northern areas record strong price gains while the south sees sluggish growth, according to Your Move.
Half of brokers see robo-advice as greatest threat
Nearly half of brokers see robo-advice and technology as the biggest threat to their business in the next three years, according to research from Legal & General Mortgage Club.
REGULATION AND LEGISLATION
Government’s plan to extend help to buy comes under fire
The Government is planning to pump an extra £10 billion into the Help to Buy scheme in an attempt to woo younger voters. However, the revival of the scheme has drawn widespread criticism, with experts saying it will increase demand and push up house prices.
UK housing market activity at its lowest level since Brexit vote
The UK housing market stalled again last month amid concerns from buyers that interest rates could rise in November, according to surveyors. The Royal Institution of Chartered Surveyors said that housing sentiment is “now flatter than any point since last summer’s referendum result”.
Tax relief changes forecast to spark property crash
Provider of audit, tax and consulting services RSM has argued tax changes facing landlords will force many to put rents up in order to cover their shortfall, which will increase the cost of renting for many tenants.
FCA urged to clarify interest-only mortgage advice rules
The Financial Conduct Authority has been urged to provide clear rules for advising on retirement interest-only mortgages amid fears advisers could face accusations of mis-selling.
PRODUCT DEVELOPMENTS AND INNOVATION
Aldermore revamps range of owner-occupier mortgages
Aldermore has made some changes to its owner-occupier range of mortgages, which it claims will attract borrowers looking for a better deal. The changes will take place across both remortgage and purchase-only products, with rates starting from 2.38 per cent.
Tesco launches new build service for brokers
Tesco has launched a dedicated new build service for brokers to speed up processing times and ensure more customers can access its mortgage products.
Keystone relaxes buy-to-let criteria
Keystone has relaxed the criteria around its buy-to-let proposition and reassured landlords it remains keen to do business following recent regulatory changes.
LV makes changes to lifetime mortgage
LV has tweaked its Lifetime Mortgage Lump Sum Plus product to allow early repayments and added a downsize option. The provider will now allow customers to make a repayment of up to 10 per cent a year from year two of the policy onwards without incurring early repayment charges (ERCs).
Yorkshire unveils first-time buyer deals
Yorkshire Building Society is helping first-time buyers get their foot on the property ladder by launching a trio of two-year mortgages. The high loan-to-value (LTV) home loans are available exclusively to would-be homeowners with 5 per cent, 10 per cent and 15 per cent deposits.
Halifax changes self-employed mortgage criteria
Halifax Intermediaries has cut the income information required for self-employed borrowers from three to two years.
Borrowers feel guilty about using the bank of mum and dad
According to Yorkshire Building Society, 66% of 18-40 year olds expecting financial support feel guilty about receiving help from their parents or other family members to purchase their first house. The report found that three-in-five (59%) would-be homeowners expecting to receive handouts from parents or other family members in order to buy a property.
Thousands of pensioners risk having their homes repossessed
Thousands of low-income pensioners face having their homes repossessed after they stop receiving government help with their mortgages in six months’ time, an insurance firm has warned. Insurer Royal London said the Government was failing to inform people about major changes to the Support for Mortgage Interest in April next year.
Brokers insist another sub-prime scandal isn't looming
The rapid growth of household borrowing – the vast majority of which is made up of mortgages – has prompted warnings from the International Monetary Fund that it could spark another crisis. Yet mortgage brokers are largely unconcerned by the rise of specialist lending, as tighter regulations have been put in place since the financial crisis.