I’ve always been an optimistic type and the mortgage market is providing plenty of reason for good cheer at present. First-time buyer activity has reached its strongest levels since before the global financial crisis really took hold and the Government’s Help to Buy scheme should help cement this recovery. With the recent announcement that there have already been 10,000 reservations using the equity loan part of the initiative, there is every reason to believe the mortgage guarantee element can be just as successful when it is implemented in January. The Funding for Lending scheme continues to tick along in the background and has been instrumental in helping the big banks rediscover their appetite to lend.
But perhaps the best news of all for the mortgage market of late – and intermediaries in particular – is the Bank of England’s assurances that interest rates won’t increase until unemployment falls below 7%. Few economists predicted significant rises in the next few years anyway, but having such a guarantee in place, albeit with a few caveats in place, gives mortgage borrowers and business owners far greater confidence to plan for the future. It wouldn’t be a surprise if the announcement not only convinced a healthy proportion of deliberating potential homeowners to actually take the plunge, but also prompted lenders to sharpen up their rates. After all, with assurances from the Bank Governor himself in place, banks have little excuse not to price their fixed rates as keenly as possible.
This is where brokers can really come into their own. If a rate war does ensue, then new borrowers – and existing homeowners looking to remortgage – will be relying on intermediaries to help them navigate the mortgage maze and find the best deal out there. One of the characteristics of the mortgage market’s recovery has been an increase in the number of people enlisting the services of a broker and, just as their services were vital when product availability was scarce and it was difficult to find a mortgage, they are just as important now in ascertaining the most suitable product from a growing number. Hopefully healthier rate competition can spark lenders back into life and can reduce their reliance on State support going forward.
Amidst all the positivity surrounding the mortgage market we’ve also been able to celebrate our own good news recently in the shape of 20 new AR firms joining us in the last four months alone. We were vocal about our intentions to expand our network this year and we are pleased that we are well on target to achieve significant growth. That we have been able to achieve such impressive figures is testament to the strength of our proposition and our willingness to listen to our brokers and provide everything they need to run successful businesses.
With Stonebridge Group in such rude health and all the indications suggesting that the mortgage market is on an upward trajectory, there are certainly plenty of reasons to be cheerful for the remainder of 2013 and beyond.
Richard Adams is managing director of Stonebridge Group