www.mortgagestrategy.co.uk ANALYSIS
Iwas pleased to see that West
Bromwich found a way to
maintain its independence
and it is certain other
societies will follow the same
model in the near future.
The government has bailed out
our banking system to the tune of
£600bn and invented a new form of
debt to equity swap for our
societies, both actions I applaud.
But specialist lenders, or
non-deposit-taking lenders as the
government calls them, have been
excluded from any help. As a result
anyone with a less than exemplary
credit history or unlucky enough to
be self-employed will find it
impossible to get a mortgage.
There are no exact numbers but
I would guess some 25% of adults
are now locked out of the mortgage
market as a result of the
Having recently rejoined
the mortgage market
after what can only be
described as an
unplanned sabbatical – I used to
work at Rooftop Mortgages – every
day I am reading more reports and
opinion polls on the property
market and with each one the
waters seem to get more muddied.
The doom mongers are still
forecasting meltdown with
unemployment due to top three
million, oil prices are surging
again and besieged mortgage
brokers are still hoping the much
vaunted green shoots start to
blossom by way of some fresh
mortgage products.
But after two months back in
the land of the living I am glad to
report that things from a bridging
perspective are starting to look
decidedly brighter.
Government should
help specialist firms
ALAN CLEARY
MANAGING DIRECTOR
EXACT
government’s refusal to offer any
support to specialist lenders.
I am not suggesting these
lenders should get taxpayer
handouts but they should be given
access to some form of liquidity
scheme.
For example, the government
could set up a forward flow
agreement for specialist lenders
that had strict guidelines on what
type of loans could be originated
and at what rates.
This would be a win-win
solution as home owners would get
access to mortgages not readily
available on the high street.
The government would be
directly stimulating the economy
and increasing its tax receipts, and
mothballed specialist lenders could
bring much-needed competition
back into the market.
Outlook is brighter
for bridging firms
GUY GARRARD
HEAD OF BUSINESS DEVELOPMENT
TIUTA
I am hopeful this is the start of
much better things to come for all.
Those bridging firms having the
benefit of well-established and
healthy funding lines that have
ridden through this devastation are
seeing unprecedented levels of new
enquiries.
And these enquiries are largely
from sensible customers who are
fully conversant with where the
market is today.
Speculators, investors and
developers are queuing up to take
advantage of the opportunities that
are presenting themselves.
In terms of a property market
recovery it is possible that
short-term funders are still at the
beginning.
But believe me when I say that
in the world of short-term funding,
we are all watering the green
shoots like mad.
Looking at the share of
lending undertaken by
brokers in Q1 2009 versus
the same period in 2008,
we have unsurprisingly witnessed
a large erosion in the percentage
of business written.
All categories of borrowers
have seen a reduction in broker
share, with first-time buyer
business reducing from 83% in Q1
2008 to 68% this year. Those
borrowers remortgaging have
fallen the most, from 79% last year
to 63% in 2009. Movers have fallen
from 66% in the same period last
year to 58% this year.
Clearly first-time buyers need
higher LTV deals and several
lenders that currently offer these
products choose to do so directly so
the ability of brokers to compete in
this sector has become limited.
Having decided to put into
writing my thoughts
about the impact of the
European and local
council elections on our hopes for
a regeneration of the housing
market, I stumbled upon a rather
ironic situation.
It’s well reported that the
Conservative Party is opposed to
Home Information Packs and for
that alone, it attracts a considerable
amount of industry support. The
other central tenet of its housing
policy is to abolish Stamp Duty on
house purchases below £250,000 –
eminently sensible to help
first-time buyers.
In the interests of balance, I
thought it only fair to take a look at
Labour’s commitments in this area.
I consulted the party’s website to
bring myself up-to-date.
There was no mention of
Brokers are still
tops for mortgages
BRIAN MURPHY
HEAD OF LENDING
MORTGAGE ADVICE BUREAU
But some brokers are pointing
customers towards direct deals and
we can see this practise gaining
ground as the broker community
adapts and evolves its business
models.
On the face of it, the figures
look alarming but this is against a
backdrop of forecasts suggesting
brokers’ business share of
mortgage lending in 2009 may be
below 50% overall.
Clearly these figures only
represent activity in Q1, but
brokers continue to be resilient.
In spite of a number of lenders
offering considerably more
attractive deals to customers via
their branches, brokers are still
writing the majority of the
business in the mortgage market
albeit a much smaller market than
we have all enjoyed in the past.
Housing recovery
not on Labour’s list
CHRISTOPHER TAYLOR
CHIEF EXECUTIVE OFFICER
LONDON & EUROPEAN
housing in policies, which are
helpfully listed in alphabetical
order, and goes straight from
further and higher education skills
to international development.
Rather than relying on Google, I
thought I’d go straight to the
horse’s mouth and call the Labour
Party. Having selected the option
‘no I certainly don’t want to join, I’d
just like some information’, I was
put on hold.
Because I have a day job I didn’t
pursue the investigations further
but it struck me I’d stumbled across
something of an ironic scenario.
We need a leadership that is
committed to helping the housing
market recover, not one
preoccupied with MPs’ expenses.
The sooner we have a general
election, the better. Then we can all
come off hold and start turning
green shoots into a proper recovery.
MORTGAGE STRATEGY June 22, 2009 13
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