Data indicates market progress - 24.09.2009

Author: David Whittaker Posted on: 24 September 2009

News that the number of mortgage approvals on house purchases at 38,095 in August was 81% up on August last year supported the evidence on estate agent activity reported over the last few months. Not surprisingly the reduction in remortgage activity at only 26,124 and 47% against the same time last year reflects the reality that current mortgage products are much more expensive than one year ago and that “back book” rates don’t look so expensive after all; as the 39,000 customers of Mortgage Express are seeing with most mortgages reverting to BBR + 1.75% ie 2,25% today.

 

However there is movement in the market...

 

At the high level Lloyds has just placed the first of three tranches of RMBS loans (AAA) totalling £4Bn with one tranche known to have been at 170bp. Whilst this is expensive money it frees up capacity (and liquidity) for Lloyds and ultimately is the first European RMBS since June 2008 – an important but necessary step towards establishing a new market.

 

At the retail level BM solutions re-priced earlier this month and withdrew the additional margin pricing on remortgage products; rumours about increasing LTVs abound but whilst the Buy to Let mortgage market is effectively controlled by a very small group of lenders achieving their desired levels of new cases, pricing won’t change significantly. However the advent of Aldermore Bank (through a restricted broker panel) showing some appetite for HMOs and other property types is also a welcome step in the right direction.

 

We are hoping to announce a 3 year fixed product for HMOs in the next week or so ; activity at both landlord and lender level in the next two or three weeks will determine the remaining months of 2009.

Author: David Whittaker