Page 4 - The Pulse Issue 6 Online

QUARTERLY MARKET REVIEW

A Message From the Directors*
MARKET UPDATE

What a crazy quarter! mortgage rates and a high employment rate, is likely to
support house price levels over the coming months.
As I write this article, a hung parliament has just been
announced. Expected by a few but clearly the cause of I find it astonishing (and scary) that 2 million borrowers
worry and uncertainty for many. who are not actually mortgage prisoners are on their
lender’s SVR. Recent research by Trussle shows 18% of
After the triggering of Article 50 on 29th March, on 18th all mortgagors are on a SVR, with inertia being the main
April, just when you thought things were settling down a reason as 1 in 4 borrowers don’t even know what a SVR
bit, Theresa May called the General Election with a view means. More needs to be done to educate homeowners
to gaining a clear mandate to make a success of Brexit. and there is a massive need for brokers to assist.
Probably THE biggest backfire of her career! As Gavin
Barlow lost his seat in the election and is now Chief of Data from the Council of Mortgages Lenders shows that
Staff, we are now in line for a new Housing Minister. Let’s buy to let purchase transactions peaked at 29,100 in March
hope they are up to the job with a clear policy to help first- 2016 and now over a year on they are down to 6,000 per
time buyers and home movers across the country! month, while remortgage levels have remained relatively
stable. Buy-to-let is going through a period of adjustment
With all the uncertainties, it’s not a surprise that the average with the changes to mortgage interest tax relief far more
UK house price rises fell 2.1 per cent in May, according to significant than the 3 per cent stamp duty surcharge on
the latest Nationwide house price index. We’ve also seen investment properties.
a 0.2 per cent month-on-month drop in house prices. In
addition, the lender estimates the average UK property is It is clear many landlords have not yet felt the full impact
now worth £208,711. Regardless of the figure, with limited of the changes because these are being phased in, and
wage increases, it’s getting harder for the first-time buyer there is uncertainty as investors are not yet sure what it
and the Bank of Mum and Dad is moving up the list of top will mean for their bottom line. There is definitely more
lenders! caution than previously.

Despite this and with the base rate remaining at 0.25% With the complexities of the regulatory changes, more and
with only one way to go, first-time buyer activity is at a more consumers are turning to Intermediaries for help
5-year high. While the base rate remains so low, continued with buy to let and non-standard applications. Two thirds
affordable mortgages have provided first-time buyers of specialist mortgages are now via Intermediaries so we
with an ideal opportunity to take their first step onto are well placed for a positive outlook.
the property ladder. For those with enough savings for a
deposit, now is a great time to buy. The good news is that there is no sign of a market collapse
while mortgage rates remain low.
The supply of new homes and existing properties available
for sale remains low, this combined with historically low Nikki Haworth
Sales & Marketing Director

3 *Information provided is correct at the time of publishing - 11/06/2017.