After a difficult few years, the outlook for the UK's mortgage industry is positive, according to a group of large mortgage lenders. A panel of mortgage lenders assembled at the Mortgage Business Expo in London last week and discussed the prospects for the country's mortgage sector. And, in general terms, the view is that the high value mortgage market is heading in the right direction.
We look at the prospects for 2013 and why more and more people are turning to a national or London mortgage broker for their large mortgage.
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Lending set to increase in 2013
Representatives from Nationwide for Intermediaries, Virgin Money and Precise Mortgages discussed the UK's mortgage market at the Mortgage Business Expo in London. The panel broadly agreed that while the mortgage market is unlikely to come on leaps and bounds in the twelve months from January, things are certainly heading in the right direction.
Mortgage Finance Gazette reports that 'with gross mortgage lending expected to reach £140 billion for 2012, the general consensus was that this would probably exceed £150 billion in 2013.'
Alan Cleary, managing director of Precise Mortgages, said that the increase in lending would be as the result of an increase in the number of funders interested in the UK mortgage market. Mr Cleary envisages a three-fold rise in funding in 2013.
Richard Tugwell, director of intermediary sales at Virgin Money, reported that anecdotal evidence from national and London mortgage advisors suggested the third quarter of 2012 was the first time in a while that the major lenders were all keen to do business. He added that any ensuing rate war could see up to 60 basis points come off some mortgage deals in the next twelve months.
As well as increased lending, brokers also expect more people to turn to intermediaries for professional advice in 2013, as we see next.
Rules that 'push customers down the advice route' are welcomed
The Mortgage Business Expo panel also responded positively to the Financial Service Authority's recently published Mortgage Market Review. Ian Andrew, Nationwide's managing director for group intermediary sales, commented: "Anything that pushes customers down the advice route is good."
Recent research from technology form Avelo found that brokers arrange six out of ten mortgages in the UK compared to just one in five arranged through a lender's branch network.
People choose to use a mortgage broker for two main reasons. Firstly, to benefit from professional, bespoke advice from a qualified person; a large mortgage is the biggest financial commitment most people ever make and so obtaining the most appropriate advice is essential.
Secondly, a broker can save a borrower time by looking after the application process. They can arrange valuations and liaise with solicitors and lenders to ensure the application moves quickly to offer and completion. Indeed, recent research found that 85 per cent of mortgages offered via a broker proceeded to completion.
The improving large mortgage market and the FSA rules will hopefully see an increase in lending in 2013. And, brokers are set to play a major part in the recovery of the UK's home loans market.
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