As the stormy seas of MMR now begin to settle, remortgage business has been hardest hit by the regulator’s new changes, recent figures from the Mortgage Advice Bureau show.
Figures released for the month of April suggest that the focus on mortgage applications has been shifted firmly in the direction of brokers, as the number of products available through intermediaries in the market place grew by 5%, with direct-only products falling by 2% in the same period.
“It’s unsurprising, but it appears that with all of the new regulatory changes to the application process, mortgage lenders are preferring to see applications come through the tried and trusted broker network, rather than committing to lengthy in-branch interviews” says Taj Kang, Business Development Director at specialist broker Contractor Mortgages Made Easy.
“Banks are realising that using retail banking staff to conduct mortgage interviews is not a wise use of resources.”
With further statistics suggesting that the average value of a property being re-mortgaged is now standing at a shade under £300,000, 6% higher than in March, the phrase ‘buyer beware’ has never been more appropriate.
“The problem is, with schemes like Help to Buy helping the property market remain buoyant, and evidently property prices creeping up outside of the ‘sale loop’, the jump to get on the property ladder is becoming far higher” says Taj Kang.
“Further news from the MAB suggests that the average house buyer now provides a deposit of over £65,000 – a figure that itself has increased more than 5% in April.”
With other statistics suggesting that the average first time buyer is getting younger, what does this mean for the nation’s home buyers?
“We are now seeing that lenders are beginning to wake up to what was once deemed ‘unconventional’ as a way of working. Whether a Contractor, a freelancer or a company director; banks are beginning to realise that the risk in lending to these clients is lower than first feared” adds Satvinder Singh, Managing Director at Contractor Mortgages Made Easy.
“Where once you would struggle without three-years’ worth of trading accounts, the implementation of MMR has been a catalyst for lenders to work alongside specialist brokers where affordability is assessed more comprehensively.”
“These areas of non-permanent employees are now an untapped resource for mortgage lending that represents a safe bet in an otherwise turbulent market, with many enjoying surplus incomes far higher than their permanently employed counterparts.”
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
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