With another month having come and gone in a flash, it is fair to say that we are far from being out of the woods, as far as the current liquidity crisis goes.
Doom and gloom stories still dominate the press at the moment. A snapshot of such reports, include one from Hometrack, reported in MM, revealing that house prices have fallen for the fourth consecutive month according to its report and only 93.5 per cent of properties are being sold at their asking price, compared to 96 per cent a year ago.
The British Bankers Association has also reported that mortgage approvals were down 38 per cent in December, year-on-year and the Royal Institution of Chartered Surveyors believes that the downturn in the market could well prevent the government from hitting its target of building three million new homes by 2020.
Stresses and strains
A clear indication that the stresses and strains of the liquidity crisis, coupled with overspending at Christmas and the New Year, are starting to take their toll on household spending, according to Moneyexpert.com in MI.
Research has indicated that 4 per cent of the 11.8 million outstanding mortgages having missed a payment on their mortgage in the last six months.
However, ever the fighters, it would seem that despite the current market conditions and the uncertainties ahead, the majority of intermediaries are maintaining their income levels, according to a report by BM Solutions in MS, which revealed that only 9 per cent of respondents felt this was a concern.
Bigger issues appeared to be criteria changes (36 per cent) and product changes (15 per cent). It would appear that remortgage business and the sale of trackers may have gotten intermediaries through what can only be described as the ‘bleak month of January’, according to MM.
A welcome boost for BTL
The buy-to-let (BTL) sector has had its fair share of coverage this week, with reports of the rental sector having grown by over 20 per cent in the last five years, according to the recently published UK Housing Review from the Building Societies Association and Chartered Institute of Housing.
Currently, over half of household moves are in the private rental sector, which is providing a welcomed boost to the buy-to-let sector, according to MSL.
Furthermore, FA has reported on the fact that according to Paragon, Polish immigrants moving to the UK have instigated the largest rent rise on record.
Further evidence that the sector is becoming increasingly active comes as MI reports that there has been an increase in the number of highly competitive rates. That said, the arrangement fees of up to 2.5 per cent are being charged to compensate for the initial low pay rates.
A mixed bag
For what the industry describes as ‘small firms’, then the contents of this week’s press is somewhat of a ‘mixed bag’.
Not only has the Financial Services Authority (FSA) announced plans to hold a series of regional roadshows, structured visits and telephone interviews from March in an effort to improve its communication with small firms, as reported in MSL and MI, but it also plans to review 3,000 mortgage brokerages during 2008, in a bid to monitor how they are implementing the FSA’s ‘Treating Customers Fairly’ (TCF) initiative.
There is also news that due to the implementation of TCF, somewhere in the region of 11,000 small firms fees are also likely to increase year-on-year by 10 to 15 per cent for the next 12 months to March 31 2009, compared to 2.4 per cent increase in 2007/08, according to MS and FA.
Talking of TCF, in MI the Association of Mortgage Intermediaries has announced its plans to obtain more clarity for advisers regarding the regulator’s expectations, which can only be a good thing to assist brokers in meeting this year’s deadlines.
The last piece of news in my round-up is a report from the Council of Mortgage Lenders reported in MI, which revealed that 2007 was the strongest gross mortgage lending year on record, having increased by an estimated 5 per cent on 2006, reaching £362 billion.
The market in 2008 is unlikely to be as strong however, with the amount of remortgage business around, it is predicted to be the third best year on record for gross mortgage lending.
