For this week’s Marketwatch, our commentators are:
Enness Private Clients managing director Hugh Wade-Jones, who says after a year of moving the goal posts, banks will have more consistent messages for brokers.
Lloyds Banking Group director of intermediaries Mike Jones, who suggests the growth in the buy to let market will continue into the new year while NewBuy will also gain momentum.
Goldsmith Williams partner Eddie Goldsmith, who expects lenders to press ahead with anti-fraud efforts through better management of their panels.
Hugh Wade-Jones, managing director, Enness Private Clients
The biggest problem with the banks this year has been continual moving of the goal posts, interest only being a prime example, whereby some banks canned it completely only to say that they will lend to a certain LTV a few months later. I think that in 2013 the banks will be more consistent on where they stand criteria wise and, although as brokers we may not like where they position themselves, at least we will be able to place or decline cases with a degree of certainty.
I’m fairly certain that in 2013 many of the high street banks and lenders will reduce their procuration fees. We saw Halifax tier their procuration fees on product transfer based on LTV a little while back and a few lenders have started to pay procuration fees based on how they judge the quality of the business. I think that as banks look to lend to only the strongest applicants at the lowest loan to values this will start to be introduced across the board.
Mike Jones, director of intermediaries, Lloyds Banking Group
The outlook for the mortgage market in 2013 looks much more promising than it did in 2012, with the two most significant elements for borrowers in 2013 being the increasing level of competition and the fact that access to funding is improving.
Lenders’ credit appetites will prove crucial over the next year, as we discover how many mortgage providers intend to (and are able to) lend more. The health of the wholesale funding markets and also the Funding for Lending Scheme will be vital. I’d expect many borrowers applying for mortgages to benefit from competitive rates, a rising remortgage market and the possibility of some easing of lending criteria by the end of 2013 – although this will be a slow development curve.
We’re likely to see the current healthy growth in the buy-to-let market continue well into next year too, and this area will certainly be a focus for many lenders. I would anticipate that schemes such as NewBuy will also gain more momentum and enable thousands more first time buyers to get on the property ladder.
In 2013 we also have the implementation of the Retail Distribution Review (RDR) and the Mortgage Market Review (MMR) which will impact the mortgage market. The long-awaited RDR comes into play at the beginning of 2013 and is intended to ensure greater transparency, with consumers receiving unrestricted and unbiased advice from better-qualified financial advisers and paying upfront fees rather than advisers receiving commission.
Whilst it’s focused on the investment markets, it will inevitably impact many advisers who also provide mortgages.
Eddie Goldsmith, partner, Goldsmith Williams
From the legal perspective one of the main themes running through 2102 and which will continue apace in 2013 is the question of fraud reduction measures by lenders. There has been a significant reduction in at least a couple of major lenders (that I know of) in 2012 in mortgage fraud involving solicitors through a better management of their panels.
Lenders across the board in 2013 will want to see this better management continuing and therefore we will continue to see a reduction in the number of conveyancers on lender panels. This provides benefit to the consumer on the one hand by ensuring that those firms still on the panel are “fit for purpose” but it could mean a lack of convenience for consumers with a growing number of local firms not being able to act for any particular lender.
Conveyancing is no longer a preserve of the “dabbler” who does some files in the morning and then goes to Court in the afternoon – 2013 will continue to see the rise of specialist conveyancing operations.