There are many ways to assess the year that was. Are business volumes up on last year? That will be a check for many even if only slightly. Have outlooks become more and more positive on a month-to-month basis? Generally speaking I’d say yes. Has there been an increase in competition? Undoubtedly yes.
Of course we have to put these responses into perspective. It’s important to remain positive but as important is being realistic. If someone was to land from another galaxy with no concept of the recent history of the market you would be forgiven for thinking that we were in the midst of a boom period.
Interest rates are at historic lows. Lenders are emerging with some fantastically competitive deals, especially via fixed rates at the moment. And house prices appear pretty stable.
All of which are the ingredients to a healthy and buoyant marketplace.
The harsh reality is that conditions are still not ideal but, and this is a big but, they are continuing to consistently improve albeit very gradually.
Lending volumes are predicted to be some £5-10bn higher than forecast at the start of the year which is great but it’s hardly climbing into the loft and stringing out the bunting time.
Recent research suggests that the total number of mortgages on offer have grown by 17% since the launch of the Government’s Funding for Lending Scheme back in August but also adds that the number of high LTV mortgages has remained flat.
This equates to activity being up but not necessarily in the areas that will make a huge impact for the borrowers who really need it. This is the story of 2012 for many and you can’t say it’s too wide of the mark.
As far as the intermediary market is concerned issues remain over the impact of the Mortgage Market Review, the removal of interest-only options and potential proc fee changes.
Whilst we are talking proc fees, and it would be remiss to comment on other lenders practices, just let me say that at Barclays we constantly review procuration fee payments to ensure they are appropriate, relevant and competitive but that we have no current plans to change them.
What is clear is that lenders will continue to place an increased emphasis on the quality of applications received.
The ideal world is that they are submitted correctly first time so that unnecessary delays are greatly reduced and it’s a fact that this is not happening as much as it should.
This issue, along with the proc fee debate in general, will certainly continue to be one of the main challenges facing the industry in 2013.
In conclusion 2012 was a safe and steady year for the mortgage market with far more positives than negatives.
For Barclays it was a busy, progressive year with lending volumes up and a raft of service enhancements made. But we, and hopefully the rest of the industry, will not rest on our laurels and 2013 will see even more opportunities being created for you and your clients.
