It’s a modern world. When was the last time you wrote a personal letter? The chances are a while back. Maybe it was to a flame at school, looking back at an ill contrived and nerve racking experience that backfired to such an extent that you had to console yourself by thinking ‘well, it’s her loss anyway’.
One new method of sorting out your love life is a ‘text-tag’ routine. I sat next to one of my friends over Christmas and he dumped his girlfriend and made up three times in one night; all he was doing was sitting in a restaurant 50 miles away from her twiddling his thumbs across the key pad.
That’s progress, and as my mum often retorts ‘leave history where it is’. As much as I hate to agree with Mum she has a point, and indeed the modern world does look increasingly different as each year passes.
First there is a cultural shift that suggests borrowing is a given and bears no stigma. In fact, the ethos has changed to such an extent that borrowing is now seen as a premier method of saving in the case of buy-to-let. It has not gone unnoticed in the media with predictions raging at 30,000 insolvencies expected in the first quarter of 2007. Business and financial advisory firm Grant Thornton said 10,000 people will either be made bankrupt or enter an individual voluntary agreement before April.
Underpinning this cultural change is advancement in technology, with the internet entering a new era with 25 million people now shopping online. Broadband has made this method of consumerism far more palatable.
Online mortgage applications have of course been around for a while now, but it is expected that i
n 2007, further technological developments will see:
The widespread use of AVMs for buy-to-lets for the first time
Super packagers able to return multiple lender decisions
Trigold having a secured loans search facility
Online Retention products becoming the norm
Lenders pursuing the route of sharing customer payment performance electronically
All of these changes are of course in vain should consumers decide against borrowing with the Base Rate increase to 5.25 per cent. It’s about demand, and the government may be deluded into thinking that allowing their agency to play with a 0.25 per cent here and there will correct the borrowing fashion to one of prudency, and while the technology fuels the problem by making life easier and easier – expect more of the same.
Market
The early increase to Bank of England Base Rate increase this month surprised the City as inflation figures are due out in February but in essence the shock is perhaps not as surprising as you may think - predictions are notoriously difficult to make. In January of last year, fifteen of the City Gurus were selected by the London Evening Standard to give their personal predictions for the BBR figure at 31st December 2006. No one correctly pulled 5.00 per cent out of the hat.
Mainstream
Britannia has completed its online mortgage application process for
borrowers.
Woolwich has relaunched its BBR+0.34 per cent for the life of the mortgage aimed at high net worth customers.
Halifax are giving a little ‘extra’ help to first time buyers by offering rates connected to a £1,000 cashback.
Northern Rock increased the Help With Costs Option to £700.
Coventry has improved its MOREgage product which combines a mortgage with an unsecured personal loan - probably in response to BM Solutions joining this market.
RBS and NatWest now collect the arrangement fees for fixed rate residential and buy-to-let mortgages, by applying the bank account or credit/debit card details entered on the application form.
Cheltenham & Gloucester will not require income verification on cases to 95 per cent LTV for a top credit score pass.
Buy-to-let
Leeds Building Society has launched its first offset buy-to-let.
Mortgage Express has extended its standard portfolio offering to £5m, higher by referral.
Self Cert
TMB has been one of the more vocal lenders on retention, to support the charge that it has removed the higher lender charge and legal fees on its entire retention range.
The Mortgage Works has launched electronic ID, increased the maximum loan at 85 per cent LTV to £1m and stripped out the antiquated additional loading for capital raising.
Adverse
Amber Homeloans has launched some aggressive three year fixes. Certain packagers including Mortgage Times have variants with free valuations.
The Mortgage Works has decided to move away from the relative comfort of almost prime down the spectrum from near prime into the heavy adverse bracket. This is currently being trialed with Mortgage Times and two other packagers. mi
