This follows FCA comments earlier this year that some lenders had possibly been overzealous in their income and affordability checks. This will be welcome news for brokers, as in a recent report in Mortgage Solutions 72% of mortgage brokers said that they believed the MMR had made lenders too risk averse.
Consumer confidence appears to have dipped a little recently, perhaps due to all the talk of an interest rate rise, or perhaps as a consequence of house prices stabilising. Consequently the mortgage market has also seen a slight downturn in the last two months.
However on a positive note higher LTV lending doubled year-on-year in September, the 20th consecutive month of higher LTV growth in the market. At the same time as the review of criteria there has also been a frenzy of lender repricing.
This is good news for consumers of course and may entice a few more people back to the market. The easing of criteria should also be good for the 100,000 potential remortgage customers who will be coming to the end of their tied-in period in the next few months.
The low rates and reviewed criteria may not be a short term thing either; it is understandable that in the wake of the MMR lenders showed a cautiousness that allowed them to limit and manage their volumes while they got to grips with the new procedures that they are obliged to carry out.
According to the Bank of England’s latest credit conditions survey, availability of mortgage finance ‘fell significantly’ over the summer, however this is likely to have left lenders with a bigger gap between their actual volumes and their earlier predictions for the year, than previously expected.
As a result we should expect mortgage business to increase over the autumn as lenders continue to amend their rates in line with competitors and with a renewed focus on remortgage clients.
Toni Smith is sales operations director at First Complete
