Has the mortgage market regained its mojo?

17 Apr 2013

There certainly seems to be a feel-good factor in the mortgage market at the moment and the optimism is being driven by a number of factors.

Competitiveness among the banks is heating up and this has manifested itself in increased activity for brokers and estate agents as first-time buyers feel more confident that now is a good time to buy.

Indeed, first-time buyer activity is at its highest level for five years and has been improving month by month since last Autumn. This was before the Help to Buy measures announced in the Budget, so the trend is only likely to continue.

There will always be those who have unrealistic expectations of the mortgage market - or who have been in a coma during the ups and downs of the last five years - which is why it is the job of those at each stage of the house-buying process to provide an accurate picture of the current situation.

It's not just consumers who aren't up to speed either - history has shown that a minority of advisers are just as likely to be on a different page.

This is precisely why risk mitigation exists, not just to protect the lender, but also to safeguard the borrower from unexpected turn of events. It's all well and good signing up to something that looks good at the time, but medium and long-term interests must also be considered.

It's not unrealistic to expect there to be a certain availability of mortgages requiring smaller deposits and lenders are starting to show they can offer these types of products in a responsible manner.

With each first-time buyer sale supposedly creating five additional sales in the chain, an increased supply of blood can benefit stakeholders across the board.

 

 

Bob Hunt

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