Peter Williams is executive director of the Intermediary Mortgage Lenders Association
The most striking aspect of today’s mortgage approval figures is that remortgaging deals, rather than house purchases, continue to make the early running in 2013.
So far this year the number and value of remortgage approvals has grown every month without fail, from £25.8bn in January to £30.3bn in April, whereas purchase activity is still below the marker set in January when it was £54.5bn.
Despite this, we have at least seen purchase volumes improve for three successive months and recover to £53.7bn in April. Spring is traditionally a good time to put your house on the market, and with lenders competing to out-do each other with favourable rates and special deals, there is every hope we will see this trend continue, albeit some may question whether spring has truly arrived!
Every passing month brings the Help To Buy mortgage guarantee scheme closer to becoming a reality, with a lot of operational details still to be determined – not least the issue of capital relief for standardised lenders. This is crucial if government wants medium to smaller lenders to fully support the scheme.
Given the many system changes lenders will have to introduce to deal with the guarantee it is vital that arrangements are settled in the next two months at the latest. The evidence to date suggests there is still a lot to resolve and the risk is that the Chancellor’s ‘big intervention’ could turn out to be rather less than hoped for.
