Brokers fall to an all time low, less than 10,000 in the market.

It has been estimated that brokers in the market have fallen to an all time low of around 10,000 a fall over 20,000 when the housing market was at its peak in 2007.

Speaking at a recent Mortgage Strategy and Abbey for Intermediaries round table, Ben Thompson, head of mortgages at Legal & General, says the accepted figure of 12,000 is probably too high.

He says he knows of a lender that has dealt with just over 10,000 brokers in the last 12 months.

But Jonathan Cornell, head of communications at First Action Finance, says: “I think the total number of mortgage brokers is now less than 10,000.”

Robert Sinclair, director of AMI, says the current figures are the ones he works around.

He adds: “Whether we drop below the magic 10,000 number is not known. But we continue to see people leaving the industry and the number of brokers continues to decline.”

Thompson adds: “You don’t want the number of brokers to fall too far because the top five or six lenders are saying that in two years’ time the mortgage market will be back to a degree.”

The Council of Mortgage Lenders last week gave a gloomy warning that the Mortgage Market Review is fatally flawed and could cause negative net lending for years to come.

Net lending is currently less than £10bn compared with over £100bn in 2007.

Speaking at the CML’s Future Housing Conference last week, Michael Coogan, director-general of the CML, cautioned that it was vital that the MMR was re-evaluated now.

He says: “The risk of negative net lending is real as we enter 2011 because of funding issues, but if the un-spoken aim is to shrink mortgage debt, this could become the norm.”

Coogan adds that more needs to be done to slow down the Financial Services Authority’s steamroller and that the trade body is planning to release its own research assessing the impact of the MMR on consumers.

It looks likely that unintended consequences of new mortgage regulations are likely to stifle innovation and opportunity.

Lloyds expects to do half of the Buy To Let sector in 2011

Nigel Stockton, outgoing sales director of mortgages at Lloyds Banking Group, says the group expects to do more than 50% of all buy-to-let lending in 2011, despite making changes to its lending criteria last week.

Speaking at the Mortgage Intelligence annual conference last week, he says: “The recent changes affect 10% of our buy-to-let lending and we anticipate doing more than half of all buy-to-let lending next year.”

The group will no longer offer buy-to-let via brokers through Cheltenham & Gloucester and Lloyds TSB Scotland and property portfolios will be limited to a maximum of three properties or £2m worth of lending - whichever is exceeded first.

Stockton says the group did £5.5bn of the £8.5bn buy-to-let market in 2009 and expects to do £5bn this year.

He adds: “BM Solutions does around three times as much business as the second biggest buy-to-let lender every day. We would like more lenders in the sector. The regulator is concerned that our market share is around 70% - it’s tricky to justify.

“We’ve looked at ways to keep lending unchanged but lower our risk, and have found portfolios of 10 or more properties are risky.” Paul Howard, head of corporate accounts at Nationwide and The Mortgage Works, was also at the event and told the audience that TMW is looking to increase its share of buy-to-let.

He says: “It’s great when we hear that Lloyds group is looking to reduce its market share because we are looking to increase ours.”

Howard also encouraged brokers to grab a slice of the market.

He adds: “Around 98% of our buy-to-let business is done through brokers and demand is only going to go up.”

Beware of the home owner squatter snatch

It was recently reported that a group of Lithuanian squatters are behind a scam in which people’s homes are seized and their homes locks are changed while they are out, even walking their dogs.

The illegal tenants have been squatting in one property for at least five months and the authorities are powerless to evict them without a court order.

In another case, an elderly man returned from taking his dogs for a walk and found that when he returned home, that a gang of Lithuanian’s had moved in and were throwing all his possessions out of the window. The most shocking part of this story is that police are powerless to act as the occupation is a civil matter.

Latest news - 40% of Lloyds customers on SVR by end of 2011

Nigel Stockton, the outgoing sales director of mortgages at Lloyds Banking Group says the bank expects between 35-40% of all its mortgage customers to be on the bank’s SVR (Standard Variable Rate) by the end of 2011.

Speaking at the Mortgage Intelligence annual conference yesterday, he says that with remortgages having fallen off a cliff, the SVR is the go-to rate at the moment.

He says: “Between 35-40% of our book will be on SVR by the end of next year, and our book represents around one in three of every houses in the UK.”

Ten-day cooling-off period for mortgages being considered

The European Commission could introduce a 10-day cooling off period for all mortgage contracts, says the Council of Mortgage Lenders.

In its News & Views newsletter, the CML says the EC is considering replacing the Key Facts Illustration with a European Standardised Information Sheet which could include a cooling-off period. A practise already used in most of Europe.

The CML says: “We understand that the Commission is considering a compulsory 10-day reflection period after the ESIS is given out for shopping around.

“As the majority of loans in the UK are arranged by mortgage brokers, whose job is to shop around for the customer across the market, this again adds no value in the UK context.”

It says the EC wants to encourage borrowers to look at loan providers from other countries underpinned by rules about how product information is presented across Europe.

It adds: “If the ESIS is now made a prescribed requirement across Europe, this will require amendments to, or replace, the KFI.

“This would have significant business costs but no obvious benefit to UK consumers as the information in each is broadly the same although ordered differently.”

The CML says the EU could also impose new rules relating to mortgage underwriting.

The Financial Stability Board - the international co-ordinating body for national financial regulators and authorities in the interests of financial stability, wants feedback on residential mortgage underwriting practices by October 25.

The CML says: “So we have new rules emerging nationally in the UK, across Europe as a whole, and now apparently also globally on mortgage underwriting.”

It is urging the EC to take a cautious approach in pressing ahead with its proposals. It says in the UK there are real risks of detriment for the industry and borrowers by pursuing national and European regulatory reform at the same time.

It wants the EC to have compelling evidence of the need to intervene to protect consumers and carry out an impact assessment of what it intends to do.

The CML adds: “Until the draft proposal is published in 2011, we do not have the EC’s evidence base, but we are unconvinced that problems in a few countries, such as the UK justify a measure which will impact across Europe even in markets where is no evidence of irresponsible lending or borrowing.”

Down turn for home loans

Only 32,000 home loans were approved last month, the lowest for 16 months. Specialists in the are blaming the down turn on people worried about job security, spending reviews and are keen to monitor their own house hold budget.

A fine home coming for Fine and Country

Fine & Country ‘Comes Home’ to 27 North Street Bishops Stortford

Fine & Country, the local, regional, national and international property specialists, has ‘come home’ to 27 North Street Bishops Stortford the office where it all began in 2001!

The move to larger premises is the highlight in what has been an outstanding year for Fine & Country who specialize in selling and letting of individual and character homes.

With over 70 years of combined experience, the highly skilled team of property professionals is still exactly the same – just moving three doors away to new larger premises better suited to serving its highly valued clients.

Fine & Country was the brainchild of Jon Cooke, also the founder of Intercounty, who recognised an opportunity in the upper quartile sector of the market by applying a fresh lifestyle approach to marketing individual and character homes - rather than just selling ‘bricks & mortar’. Fine & Country was then duly launched from the 27 North Street, Bishop’s Stortford office in July 2001 and has had a meteoric rise since then as the fastest growing network of property specialists. With its head office in Park Lane, Mayfair, the company has over 300 offices globally, with a very strong local presence on the A10/M11 corridor.

Fine & Country has recently been recognised by receiving FIVE of the ultimate estate agency accolades including TWO awards sponsored by the Sunday Times - the GOLD Award for Best Overseas Estate Agent together with a Best Marketing Award.

Fine & Country has grown its market share year on year and has enhanced its identity as the stand out agent with the reputation for intelligent and creative marketing.

The Fine & Country team are delighted to be ‘coming home’ to 27 North Street. Steve Lawrence, of Fine & Country Bishop’s Stortford comments: “We are really pleased to be back where we belong in our newly refurbished stylish offices, where our focus will be on continuing to offer outstanding customer service to vendors and landlords of special homes”

The Team at Fine & Country would like to take this opportunity to thank all our clients as without their support we would not have grown from our premises in North Street Bishops Stortford to over 300 offices across the globe in such short space of time.

Increased tracker rates from Northern Rock

Northern Rock has increased its tracker rates by up to 0.30%. For its three-year trackers it has increased rates from 2.79% to 2.99%, base plus 2.49% for 70% LTV and from 2.89% to 3.19%, base plus 2.69% for its 75% LTV deal.

For purchases it has increased its 70% LTV two-year tracker rate from 2.59% to 2.89%, base plus 2.39%, and its 75% LTV tracker rate from 2.84% to 2.99%, base plus 2.49%.

Thousands of agents are flouting the privacy protection law

Thousands of estate agents and letting agents could be unknowingly breaking official privacy laws, according to Privacy watchdog.

The Information Commissioner’s Offices believe that a large number of estate agents are failing to notify them that they are handling customer’s personal information.

Under the Data Protection Act it is necessary for all organisations handling personal information to tell the ICO (Information Commissioner’s Offices). As property agents routinely process personal data, such as private financial information, the ICO warn that agents need to notify them as a matter of urgency.

Currently only as few as 3,734 estate agents out of an estimated 12,000 in the UK and only 1,416 of lettings agents appear on the ICO’s public register, making up only a tiny proportion of the industry.

Mick Gorrill, head of enforcement at the ICO, said: ‘We want to work with the industry to ensure all property agents meet the legal requirement to notify us that they are processing personal information. A targeted approach working with stakeholders and membership bodies has proved highly successful in other sectors. We will be writing to organisations providing them with advice and encouragement to notify.’

‘However, if that encouragement is ignored, we will take action against those who flout the law. The message is very clear – notify with the ICO or face regulatory action.’

85% of consumers want to be home owners

A consumer opinion survey undertaken by YouGov for the Council of Mortgage Lenders shows some 85% of people aim to be home owners in the next decade.

Last time the survey was undertaken, in 2007, the proportion who expected to be home-owners in ten years’ time was 84%The CML has asked the same questions about home-ownership aspirations periodically since 1975.

Fair wear and tear for landlords and tenants?

The term “fair wear and tear” appears on most tenancy agreements. But what is fair to a landlord may not necessarily appear fair to a tenant, and vice versa.

In general terms it is usually understood that fair wear and tear means that in regard to any apparent damage caused to part of a landlord’s property, the landlord must take account of reasonable wear in the day to day usage of the property, and he/she must not expect over–compensation. Indeed, within reason, wear and tear is part of the cost of letting a property.

In calculating any actual damage that does occur, the original age, quality and condition of any item at the commencement of the tenancy should be considered, along with the average expected useful life of the item, expected reasonable usage, number of occupants, and length of occupancy. There is certainly no legal right for a landlord to expect to have the property returned to him in the condition in which it was at the start of the tenancy, and the tenant’s deposit should not be used to achieve this.

If, for example, a table is damaged, it would not be reasonable for the tenant to replace this with a new table, but with a similar one in terms of age and condition to the one damaged before it was broken. If the damage is repairable then a good repair should be acceptable. A small stain on a carpet should only cost the amount charged to remove the stain, not the cost of entire replacement. However, if replacement is necessary, the cost should be apportioned according to the age and expected lifespan of the item, using the following formula, where:

A = Cost to replace eg £300

B = Actual age of item eg 4 years

C = Expected Normal lifespan eg 10 years

D = Residual Lifespan (C-B) 6 years

E = Annual Depreciation (A/C) £30

Apportionment to tenant (DxE) £180

Generally, tenants are much more respectful of a landlord’s property than is often expected, although good vetting procedures at the outset help. However, accidents do happen and this is where the term “reasonable” can be very useful for landlord and tenant alike.

Cuts and effects on the Housing Market

It is possible that proposed government spending cuts, could reverse recent house price growth.

Firstly, the rise in house prices has taken many by surprise it has been based on weak fundamentals with only a limited rise in demand. A knock to economic growth could push back overvalued house prices.

The good news is that a recent forecast for UK growth by OBR suggested the UK economy will expand by just over 2% a year. This is not spectacular growth, but will help to maintain more stability and reduce unemployment. (Growth rates UK).

However, the concern is that a combination of fiscal austerity and a European wide recession could lead to lower growth in the UK and if things turned really bad we could have a double dip recession. It means that the prospects for interest rates are likely to remain at 0.5% for a considerable time. Despite inflation exceeding governments target, there is a need for a loose monetary policy to offset the fiscal deflation.

Prolonged low interest rates will continue to be good news for homeowners – presuming they can get access to cheap mortgages.

So what are the predictions for the UK's house prices?

I find that predicting house prices in the UK has become very unpredictable, many analysts are increasingly reluctant to give any predictions for more than six months hence.

Capital Economics, the consultancy led by Roger Bootle, expects house prices to fall 5pc this year, and 10pc in each of 2011 and 2012.

Why they could fall:

The number of sellers are starting to exceed buyers, which is putting downward pressure on prices.

• Interest rates are currently at record lows, but are likely to be rising in 2011 and 2012. This will come as a shock to homeowners who have got used to record low mortgage rates.

• Fiscal Squeeze and dangers of double dip recession. The government have announced plans to cut spending from 2011. This will lead to job losses in the public sector and negatively impact on economic growth. With unemployment still very high this will lead to more homeowners struggling to pay their mortgages which might result in them putting their property on the market.

• New criteria for mortgages makes it much harder to get. New home owners are increasingly have to save a larger % of their house as a deposit. (though there are some promising signs of a thaw in mortgage conditions. Though I feel if house prices were to reverse, banks would return to being risk averse and be reluctant to lend without large deposits.

However why they might not fall…

• The worst of the recession may be over. It is hard to see a recovery as being anything other than slow. However, at 2.5 million unemployment may have peaked, and could slower recover, as long as recession doesn’t continue.

• Low Interest rates may remain. Given the fiscal squeeze, it is more likely the Bank of England will be able to keep interest rates at record lows.

• A rise in base rates may affect mortgage rates less than expected. With base rates falling to 0.5%, many banks failed to pass the base rate cut onto consumers, preferring to increase their profit margin and encourage savings. If base rates did rise, the impact on mortgage rates would certainly be less.

•The number of sellers may fall if house prices fall.

• In Southern England there there is always a lack of housing, demand always outstrips supply.

Seven times more broker products than direct

While the total number of mortgage products across intermediary and direct channels rose 16% from an average in July of 5,208 to an average of 6,050 in August, there was only a 7% rise in direct products – 1,401 to 1,505.

This is in comparison with a 19% rise in intermediary products, which rose to an August average of 4,545 from a July average of 3,807.

Confidence among landlords has dipped for the first time in almost two years, driven by uncertainties including housing benefits and tax changes annou

54 per cent of landlords (57 per cent in Q1 2010) rate their prospects for the next three months as good or very good. However, four in ten landlords expect the increase in Capital Gains Tax to have a detrimental impact on their investment, while others predict the increase, and any future interest rate rises, will prompt a decline in investment.

Landlords also expressed concern about planned cuts to the Local Housing Allowance which could lead to more rent arrears.

Chris Norris, Policy Manager, NLA, commenting on the Index, said:

"Despite gains over the past two years, landlord optimism has dropped from the first quarter of 2010 as landlords consider tax changes announced in the emergency budget and they hear talk of a double-dip recession. Furthermore, cuts to Local Housing Allowance is causing concern to many landlords as it could leave their tenants struggling to pay their rent."

"Despite these negative factors, the NLA / BDRC Continental survey shows that more than half of landlords are still positive about the next three months, predicting strong rental demand as people hold off deciding whether to continue renting or buy whilst current economic uncertainty continues."

With the current uncertainty in the market place we will just have to wait and see what affect this will have on landlords and rental prices.

Why Sell, simply let your home instead

With a market that is not forecast to see an imminent significant increase, as many as 10% of homeowners would consider letting their home instead of selling it. Which can offer house owners a considerable number of advantages.

Firstly, the value of a property is, in practical terms, irrelevant, unless you are actually selling it. So renting it out instead means that you simply don’t have to worry about property prices, let alone finding a buyer when they are thin on the ground. Of course, if property values are a concern to you, then renting your home out as a long term strategy will give you the time you need for prices to increase further.

Secondly, you get to keep the investment in which you have no doubt expended time and money, and you don’t have to spend money on the various costs of selling, and especially re-buying. There is also something pretty cool about being a landlord!

Renting is also quicker than selling, so you can immediately realise your short-term plans, and unlike selling, renting is highly reversible should you plans change in the future.

Finally, the way mortgage availability is looking, it might just be worth keeping the mortgage you have, as a new one might be harder to secure, should you wish to buy again in the future.

Winner announced of Pay your mortgage for a year

INTERCOUNTY ANNOUNCES THE WINNER OF THEIR “MORTGAGE PAID FOR A YEAR” COMPETITION

The lucky winner of this years "Pay Your Mortgage for a Year" competition was won by Mrs Joanne Pendrey, through Intercounty's Chester office.

Joanne, a first time buyer said “I really can’t believe it – I am going to have my mortgage paid for a whole year!”

Steven who arranged Joanne's mortgage was elated to hear the news one of his clients had won the competition, “Joanne was a pleasure to deal with and I was so happy to be able to give her the good news. Having worked in the mortgage industry for many years this has to be one of the best days so far. The job of advising clients on their mortgage and protection needs is a rewarding one, to also be able to see how Joanne took the news was just amazing.”

Greg Young, Managing Director of Intercounty comments “ 2010 has been an exciting year for Intercounty and a year of outstanding growth, which has only been possible by the commitment,and dedication of our staff. We launched the Pay Your Mortgage competition in January as part of our expansion celebrations and we are really pleased to be making someone’s year."

Van bugger disrupts driving recovery

I've fallen off everything there is to fall off with two wheels- on the 10th of July I fell off my BMX bike and broke my collar bone. With time to reflect over my four day hospital stint in Harlow Hospital, one op later and a my right arm in a sling, I started to contemplate writing a book, until I realised that typing could also be impaired by my new disability so I gave up on that too.

Instead I engaged the world of public transport, welcome to the world of buses, trains and shanks' pony. I never realised just how much I loved my car until that point.

A week in Crete also had its low points, strict orders not to swim from the doc were obeyed momentarily, as temperatures on the island shot up to 45 degrees, I decided to learn to swim with a sling, one arm elevated, trying to avoid going around in circles!

Only last week the impediment was removed - now I've been left with another one, firstly I still can't get my wallet out of my pocket (which of course has its benefits), and secondly both family and the team at Intercounty find my lack of motor skills hilarious, talking of which I finally back to driving after 7 long weeks, and within half an hour of being on the road, I get hit up the bum by a van bugger. All that time the car sat on the drive, and now it's going to be sitting in a garage waiting to be repaired. £300 of damage - perhaps public transport is not so bad after all!

The physio starts Monday.....