Market Watch: The wheel keeps turning
I write this on the day that all of you in the mortgage brokerage world love and hate in equal measure – the dreaded last day of the month.
It’s that last rush to get everything on the system so you can have a good month of watch or save an average month.
I’m still recovering from last week’s excellent Mortgage Strategy Awards, which were great fun as always and had a great host in the person of Tom Allen. It was a well-deserved opportunity to let my hair down with the big and good in the industry – even though these days my hair is receding.
If only our dear leaders would take a leaf from our book
If I had more hair, I’d probably get a lot out of it by the end of the month anyway. The pressure seems to be on everyone; not just the brokers, but the administrative and sales support staff working very hard, often for the broker to take the glory (don’t worry, we hear you and love your work), as well as the lenders and attorneys for month-end completions.
As I write, tonight is that eerie mythical calm that spans the end of one month and the start of another, when everything resets and we set off again, optimistically hoping that this month will be as good or better than the previous one – and so the wheel keeps turning.
A poll by Martin Lewis found that 69% of people would prefer face-to-face advice
It’s hard work being a broker and the last month has been crazy by any measure. Not just busy, but the added pressure of getting applications into lenders so quickly to book rates for our clients.
Late entry, begging customers to send information, system crashes and email cascade: did you do this, did you get that, our prices go up in 30 seconds, prices go up, your rating is less than the price, please send it back, and the dreaded “I’m sorry, you’ll have to retype”!
Lenders are also working hard and we have always applauded that, but some also have to give the broker some slack. Sure, there will be typing errors, a missing document, etc., but you lenders always ask us to give you some time when you’re busy, and we deserve the same. The less notice we receive, the more rushed we must be by definition.
It’s hard to keep track of the mysterious whereabouts of the less spotty mortgage rate that stays for more than a few days
We are lucky that most of the lenders we deal with are fabulous. Overall, broker/lender relationships are stronger than ever, which really works for the only person that matters: the customer.
There is a new generation on both sides who have never experienced a rapid rate change environment, especially the stress of a bullish environment, and I hope we all take the time to watch out for each other the others, be it broker, administrator, lender, BDM or anyone in the process. If we’re not calm and flowing, how should our customers feel?
If someone you know in your company seems more anxious than usual, approach them – a kind word can make all the difference.
The Equity Lending Assistance Program will close to new applicants earlier than expected. I would be surprised if a new or similar program is not launched
If only our dear leaders would take a leaf from our book. As we whip our guts out, they seem more interested in saving their skins, especially as letters arrive at the 1922 Committee of the Tories stating that Boris should probably leave now. “Partygate” continues to hover above him like a small dark cloud, and the cost of living crisis begins to bite.
Meanwhile, the latest consumer credit hike reported by the Bank of England will no doubt set off more alarm bells there. People can take out credits and loans if they are confident, but the worry may be that they are looking for extra cash to cover their bills.
What’s surprising, given that every broker I’ve spoken to seems to need a vacation, is that there’s been a drop in mortgage approvals. April and May were exceptionally busy months, although we expect the combination of weaker borrower sentiment and tighter lender affordability to have an impact.
Your lenders always ask us to give you some time when you’re busy, and we deserve the same.
It was also interesting to hear Housing Secretary Michael Gove suggest lenders could do more to lend. Lenders have lent and are lending as much as they can within the current constraints of stress testing and affordability limits.
Lenders are fairly playing by the rules that were imposed after the credit crunch more than a decade ago. Those that offer higher earnings multiples do so within the rules and usually on longer-term fixed rates, or do so where affordability has long been established.
Yes, lenders could consider other ways to be innovative, taking rental payment history as proof of affordability, to start with. But there are a host of options – long-term solutions, family deposit schemes, step-in mortgages and ready-to-go loans – designed to help within the regulatory constraints imposed on lenders. Unless we develop something really innovative, like co-ownership, lenders will be hard pressed to see what more they can do to satisfy risk and regulation.
Most of the lenders we deal with are fabulous. Overall, broker-lender relationships are stronger than ever
But it’s an interesting debate: what could we do to innovate and lend more, given the current constraints? Respond in the comments section or on a postcard.
In money markets, the three-month Sonia still smokes higher, up 0.18% to 1.41%, and swap rates show no signs of easing.
From the last column:
2-year silver is up 0.07% to 2.27%
3-year silver is up 0.08% to 2.27%
5-year silver is up 0.12% to 2.19%
10-year silver is up 0.14% to 2.04%
As usual, it’s hard to track the mysterious whereabouts of the less spotty mortgage rate that’s left for more than a few days. They are just too much.
Some of the interesting elements include Santander’s new set of loan rates at 95% value outside of the government program. All have no arrangement fee and start at 3.34%. It also moved its criteria for self-employed borrowers, allowing them to borrow up to 90% LTV.
The latest consumer credit hike reported by the Bank of England will no doubt set off other alarm bells there
Digital Mortgages is reducing LTV proceeds from 85% to 90%, while NatWest is increasing its maximum LTV for foreign nationals who do not have permanent residency, EU settlement status or Irish citizenship, 70% to 75% LTV.
On all self-employed claims submitted to HSBC, it now deducts any coronavirus-related rebound loan or business interruption loan scheme repayments from net profits. It also introduced an international line of residential mortgage products for new and existing customers. Tariffs for residential applications will differ between UK and non-UK residents.
BM Solutions followed Halifax by changing its product transfer rates from a standardized suite to individually priced customer products.
What could we do to innovate and lend more, given the current constraints?
The Help to Buy Equity Loan Scheme will close to new applicants earlier than expected, with the deadline now set for October 31. The idea is that this will give people plenty of time to complete by March 31, 2023. I’d be surprised if a new or similar program wasn’t launched, but watch this space.
Finally, I saw an interesting poll conducted by the legend, Martin Lewis, which asked, “If you needed important financial advice, would you prefer face-to-face or phone/video chat?” The result was that 69% of people would prefer face-to-face advice.
Even more strikingly, the results were the same for the under 40s as for the over 40s. Food for thought.
Andrew Montlake is a director at Coreco
No FSCS levy to pay mortgage finance intermediaries in 2022/23 – although this may be temporary, that’s good news
Santander for its recent changes and improvements
Government ban on land rents for most new residential leases, effective June 30
The increasing time from offer to completion – this is a worrying trend
Misinformation about improving EPC ratings on your home, such as spray foam insulation
Those who still think it’s okay to behave inappropriately at industry events, especially around women – the world is changing
What’s really squeaking my gears?
I generally prefer to see the good in everyone; give the benefit of the doubt and think that any help I give will be appreciated.
I am fortunate to have been helped by great people in this industry, who have voluntarily given their time and continue to give, without expecting anything in return. I’ve always tried to act the same way, giving time where I can, and I’d like to do more.
I love the new generation of people who will be future leaders. They are different, bold and full of amazing ideas. We all need to think about how we can help them, how we can give them confidence and knowledge, and make sure their passion doesn’t dry up when they hit glass ceilings or closed doors.
We all have to do our part, and that’s what I love about the new HSBC event for future stars – a great idea.
I hope people will remember the time given to them. Those who forget probably won’t spend their time on the next new breed.
Only by framing and offering to listen, speak and simply be
where future stars will begin to emerge.
We all need a helping hand sometimes, no matter what stage we’re at, so let’s remember to give as well as take.
This article appeared in the June edition of MS.
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