Rob Clifford is chief executive of If I Were You and CENTURY 21 UK
In the mortgage market, the phrase ‘start as you mean to go on’ doesn’t often hold true; indeed over the course of any 12-month period the end of a year tends to look completely different to how it kicked off, with a number of ups and downs throughout to keep us all on our toes.
Take, 2014 for example, there has tended to be a mortgage market narrative that the first three months of last year effectively amounted to the lending community going hell for leather, hoovering up business, before the inevitable slowdown that would accompany the introduction of the MMR. When if you look at gross lending and mortgage activity levels throughout that post-Quarter 1 period you’ll see that the market actually picked up and was running at full 2014 steam towards the mid- to end of the summer before a drop-off in the last couple of months of the year.
That said, the gross lending ‘drop-off’ – the latest figures we have are for November – actually meant a fall from £18.6 to £16.9bn. A figure which still trumped the levels of gross lending in each of the first five months of 2014. So, we can actually see a strong and positive rise in lending throughout the year before a perhaps inevitable slight pull-back by the end of 2014. Not quite the ‘fill your boots’ pre-MMR story that some have been pedalling.
However, with 2014 now behind us, what are we to make of the next 12 months? Well, no sooner had the working day begun again on the 2nd January but lenders were quickly making their pitch for increased business levels with some headline-grabbing rate cuts.
The HSBC ‘stable’ were first out of the blocks, with HSBC itself launching a 1.29% two-year fixed rate – who said low LTV fixed rates wouldn’t go any lower? – and First Direct offering up a 2.39% five-year fixed rate offer.
Back in the not so distant past, of course, the broker community would be quick to point out their lack of access to such deals and, while this remains the case for First Direct, at least we now have a situation where there is broker distribution for HSBC’s products.
What perhaps the HSBC/First Direct price changes do show is that we have not quite reached the bottom when it comes to rates, and lenders are not likely to be hanging around when it comes to fighting it out for business in the new year. As mentioned earlier, these are headline-grabbing however let’s not forget these deals come with significant fees which may make other less ‘eye-catching rates’ the better option anyway.
Which of course makes the case for consumers continuing to seek out the services of a mortgage adviser – a point which should be made loudly and proudly by the intermediary community. It’s not all about the rate and consumers should be continually reminded of this, not forgetting the point about the large equity/deposit levels required to access these deals in the first place.
That said 2015 has kicked off sharply with no hanging about in the new year changing room. The game is certainly afoot and I feel incredibly positive about the year ahead and, in particular, the growing role mortgage advisers will have in developing a marketplace which never stands still.