The mortgage market: Quarterly review
Find out David Lauder's thoughts on what is happening in the mortgage market in July 2014.
Q: What are your latest impressions of the market?
A: The right properties are selling very quickly (within two weeks). This is good from a seller’s point of view as there seems to be a lack of stock of new properties coming on to the market, and with willing buyers ready to move for the right property quickly if and when it becomes available, properties are going to closing dates with a number of offers which are often in excess of the Home Report valuation.
Equally, the buyer is in a stronger position when the property has been up for sale for a longer period and there is less interest from other parties. The buyer is then in a one on one negotiation position which means they can try to get a discounted price.
At ESPC Mortgages we have seen plenty of mortgages available from 5% deposit on the Help to Buy Scheme right up to 40% deposit, which will get you the best rates as you are rewarded by having the bigger deposit.
Q: Are you noticing anything happening with interest rates?
A: The Bank of England have not moved rates at present but whether that changes if this level of activity continues remains to be the seen. I would note that the mortgage providers themselves seem to have increased rates slightly, possibly due to volume of business they are doing and also to factor in the new requirements from the Mortgage Market Review which means cases are taking longer to be assessed.
Q: Have there been any changes since the new requirements from the Mortgage Market Review were introduced?
A: Yes there has been some change and it may take a few months for new processes to bed in. Mortgage providers are now assessing cases in finer detail and requiring more information to check clients spending habits. The main requirement now is typically more statements and information. Clients are normally asked to provide at least three months bank statements to review how finances are conducted and what fixed commitments they have to ensure that a mortgage is affordable.
The MMR changes commenced on the 26th April so this means that clients who had an Agreement In Principles (AIP) prior to this date may run the risk of these decisions no longer being valid, as cases are more strictly assessed. This would however only result in extreme circumstances and the vast majority of cases will not experience any problems.
It is important to highlight that mortgages are taking longer to be formally approved, typically now 3-4 weeks as opposed to previously 2-3 weeks.
Q: CML have reported that the first time buyer market is very busy– have you noticed a similar trend with ESPC Mortgages?
A: Yes, first time buyers are still our main type of client and we are helping more and more at present buy their first property. We do also help home-movers and buy-to-let clients get on and move up the property ladder.
Q: Is there any advice you’d give for someone looking to move home just now?
A: If you are selling, be prepared for what might be a quick sale if it is the right property in the right area. Therefore, it is important to keep an eye on what properties will be available that you might like to buy. This can help the buying and selling to be a simultaneous transaction.
There has been some negative press commenting that it is now more difficult to get a mortgage, but if you conduct your finances in a good manner and remain within all your agreed facilities then this shouldn’t be a problem. Make sure to seek independent financial advice, like we offer here at ESPC Mortgages, where you can be guided through the process.
David Lauder is Mortgage and Financial Planning Consultant who helps clients find the most suitable mortgage solution tailored to their circumstances along with identifying any other gaps they may have in their finances.
Call him on 07810 522 422.
Read some of David's other articles
- How much deposit do I need?
- Predictions for 2014
- What is an offset mortgage?
- Affordability, how much can I borrow?
The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.