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Mortgage market review - February 2017


Mortgage market update for February 2017.

Macro news and drivers

Threesixty backs new club for mortgage advisers
Service provider Threesixty has backed the launch plans of equitable mortgage club The DA Alliance. Around 120 brokers, controlling lending of £2.3bn,have already showed interest in signing up to the alliance, which is the brainchild of London Money director Martin Stewart.

Won't move? Can't move!
Helping homeowners move house could assist first-time buyers get on the housing ladder, the Council of Mortgage Lenders has said. The CML has pointed out that while the number of first-time buyer transactions is recovering since the crash, the number of home movers has barely increased.

Property transactions nudge up
The number of residential property transactions increased by just 0.2 per cent at the end of last year. According to HM Revenue & Customs there were 97,250 such transactions in December, up by 220 from the previous month.

Quarter of brokers struggle to explain offset mortgages
Borrowers are failing to benefit from an offset mortgage due a lack of understanding of they how these deals work, research from Accord Mortgages revealed.

House prices stable despite earnings slowdown
House price growth remained stable in the first month of this year, despite there being signs of a slowdown in the British economy that could put pressure on the housing market.

Cashback for first-time buyers decreasing
The mortgage cashback era is coming to an end, according to the latest data. According to research compiled by Moneyfacts, cashback deals have decreased over the past two years.

Regulation and legislation

The impact of Brexit and taxation on BTL  - The past year has been rather unsettling for the UK's buy-to-let market. Firstly there were a number of regulatory and tax changes which unfolded, creating a degree of uncertainty among landlords and tenants.

HMRC's stamp duty tax take soars
In the last three months of 2016 HM Revenue & Customs earned £519m extra from the 3 per cent surcharge payable on stamp duty for second homes.

CML calls for review of lending rules
The Council of Mortgage Lenders (CML) has challenged the Financial Policy Committee (FPC) to review its rules for borrowers, following criticism of the higher rate stress tests.

Product developments and innovation

Castle trust overhauls online service for advisers
Castle Trust has relaunched its mortgage proposition, with a new website and telephone number to make it easier for brokers to do business with the lender.

Aldermore halves demand for self-employeds' history
Mortgage provider Aldermore is to reduce the minimum accounts history a borrower must provide when applying for a residential mortgage from two years' history to one.

TSB cuts BTL rates and triples cashback
TSB has applied a 0.10 percentage point discount on its entire buy-to-let range while upping rates on selected residential fixes - both for home movers.

New mortgage offer for self-employed
The self-employed, contract workers and those with less than perfect credit histories are being offered a tailored fee assisted remortgage offer by The Mortgage Lender (TML). The provider, which only deals through intermediaries, is offering to two-year fixed rates on loans up to 85 per cent loan-to-value, with rates starting from 3.41 per cent.

Accord overhauls offset range
Accord Mortgages is to launch five new options to its offset range from 1st February including a choice of mortgages with no upfront fee. The new offsets are available to both buyers and borrowers looking to remortgage over a choice of different terms.

Fleet Mortgages launches individual landlord products
Buy-to-let specialist lender Fleet Mortgages has launched two new products for individual landlords. From 31 January, advisers will have access to two-year fixed rates, both offered at 75 per cent loan-to-value (LTV) with a rental calculation at 125 per cent at 5 per cent.    

Metro Bank slashes fixed rate mortgages
Metro Bank has launched a record low five-year fixed rate up to 65 per cent loan-to-value (LTV) at 1.84 per cent.

Atom Bank expands digital mortgage range
Atom Bank has has extended its digital mortgage range with 80 and 85 per cent loan-to-value (LTV) deals on two and five-year terms across purchase and remortgage.

Consumer trends

Over-55s spending tax-free cash on holidays
People over-55 are increasingly spending their tax free pension allowance on holidays and living expenses, research by Fidelity International has revealed. That meant almost as many people used their pension savings to pay for a holiday as used it to pay off their mortgage (10 per cent).

Experts corner

Industry can profit by embracing AI
Artificial Intelligence (AI) has been around for a long time, dating back even beyond Alan Turing's seminal work in the 1940s. The idea that machines can conduct cognitive functions and be capable of learning and problem-solving has gone through several periods of hype and disappointment.
Steve Bolton - RLAM - via