Confidence in the mortgage market in the UK has rocketed amongst intermediaries as they become increasingly positive about the overall outlook, according to a new survey covering the second quarter of 2013. The findings revealed that 84% of brokers were confident about the mortgage market, a 17% increase on the previous quarter and a 46% increase on the same quarter in 2012, according to the latest Halifax Intermediaries Confidence Tracker.
Continuing the upward trend of the previous two quarters, 82% of brokers were confident about the prospects for the intermediary sector, up 18% compared to the previous quarter. Many said that lower rates as a result of the Funding for Lending scheme and repeat business are the main drivers of the increase in overall confidence. Those that were not confident in the sector cited that the restrictive or inconsistent underwriting policies of lenders created some challenges.
The findings come as lending to first time buyers, home movers and remortgagors is on the rise. The number of mortgages to first time buyers in May reached 25,100, some 29% higher than in April, and 42% higher than in May last year, figures from the Council of Mortgage Lenders show. First time buyers accounted for 45% of all loans for house purchases, similar to the levels of the past few months but considerably higher than the 38% seen on average since 2007.
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The number of first time buyer loans was the highest monthly figure since late 2007 and marked contrast to the low point of just 8,500 loans in January 2009. By value, first time buyer lending reached £3.4 billion in May, up from £2.5 billion in April and £2.2 billion in May last year. The CML said that for some months there has been an increase in the number of first time buyers entering the market with smaller deposits. This has now resulted in a shift in the average first time buyer loan to value ratio rising to 83%, up from 81% in April and the highest ratio since November 2008.
So is seems like lenders are becoming more confident. Ian Wilson, head of Halifax Intermediaries, said that it is encouraging to see increasing confidence in the sector over the last quarter. ‘Whilst the economic outlook remains challenging, we are seeing a slight easing of funding pressures, leading to an increasing number of lenders reducing rates and launching new products to the market, providing further optimism,’ he added.
The more competitive rates being offered throughout the first half of the year saw a marginal increase in the average number of cases being written per individual broker to 69. In terms of the type of business being conducted, brokers are reporting that in the second quarter cases, business from both home movers and first time buyers remained consistent, with volumes down this quarter for remortgage and buy to let applications.
Meanwhile, the Halifax is now offering £500 cash back across a number of first time buyer mortgages. ‘We’re keen to help reduce the financial burden at what is an already expensive time. The current £500 cash back offer gives first time buyers the added benefit of being able to use the money how they want, whether that’s towards furnishing their new property or simply to help cover other costs,’ explained Craig McKinlay, mortgage director at the Halifax.
Earlier this year, Lloyds Banking Group announced the UK’s largest commitment to support first time buyers by committing to lend £6.5 billion to help approximately 60,000 customers make their first step on to the property ladder in 2013. In the first quarter of 2013, Lloyds Banking Group helped 13,000 first time buyers get on the property ladder.