Despite the upturn in buyer confidence since the beginning of the year, changes in credit terms and interest-only products, along with increased pricing for higher LTV mortgages from some lenders, are all creating stumbling blocks for advisers and intermediaries.
At Connells Group we recorded a strong rise in property sales through our estate agency network showing that buyers are now out in force and looking to move home.
This was, in part, fuelled by greater activity in the first-time buyer market as those looking to get on the property ladder rushed to complete before the stamp duty exemption holiday.
The role of first-time buyers should, however, not be overstated as other areas of the market also performed well with home movers and buy-to-let landlords adding to buying activity in Q1.
Despite these recent trends, and the fact we are seeing more active and decisive buyers in the market, lender activity is making it difficult to maintain current levels of confidence.
Earlier in the year we experienced an abundance of short-term rate pulls which saw lenders imposing changes to products with little or no notice to intermediaries and their customers.
In the current market, one just has to look at NewBuy and the limited distribution channels which lenders offering products for this scheme are adopting to see the restrictions that advisers and in turn their customers are facing.
We’ve seen increased confidence at the start of 2012 but it is still fragile with many in the industry concerned about how the second half of the year will develop.
With careful management, lenders and mortgage advisers can maintain confidence and make sure we reach those individuals who have the potential to fuel activity across the housing market, without overstretching themselves or putting unnecessary risk on the lender.
Adrian Scott is mortgage services director at Connells Group
