For immediate release
3 June 2009
Is the tide turning? Brokers expect the first increase in first time buyer and home mover business in 18 months
Brokers expect to handle slightly more business for first time buyers and home movers over the next two months - the first time they have forecasted positive growth since the question was first asked 18 months ago in the IMLA survey of mortgage intermediaries. While growth levels (in terms of numbers of loans) remain very modest, with activity for first time buyers up on average by 0.9% and for home movers up 0.7%, this may reflect a turning point as intermediaries start to see a symbolically important return of confidence and activity to the market.
Since summer 2007, brokers’ projections for first time buyer and home mover business have been consistently downbeat, with a low point in May last year when they expected business from first time buyers to decline by almost 5% and from home movers by over 3%. Not surprisingly, expectations regarding remortgaging were relatively more positive, but even that has been consistently in negative territory since last May. Now remortgaging is predicted to decline more slowly by 0.4% and buy-to-let cases by 0.7%.
Actual numbers of mortgages handled by respondents have declined significantly since late 2006, when they peaked at an average of 20 loans per office. Since summer 2008, the fall has been precipitous, dwindling from 16 in July to 10 now in line with the contraction of the mortgage funding market. Now that has stabilised intermediaries are signalling a little more optimism
In terms of status type, intermediaries expect to see growth of 0.3% in standard prime loans, while sub-prime, self-cert and other types are predicted to decline.
Peter Williams, IMLA’s executive director, said: “We are not out of the woods yet but there are early tentative signs that the market is starting to return - at least from intermediaries’ perspective. For the first time in 18 months, brokers expect first time buyer and home mover activity to rise slightly, on the back of renewed interest in the housing market. While the level of growth is small, at less than 1%, this is an important signal that confidence is beginning to pick up. There is a modest improvement in mortgage availability and estate agents are starting to report a rise in property sales. Further work still needs to be done to improve availability of mortgages in the sector, however, for example by way of government initiatives to support specialist lenders and the full spectrum of building societies.”
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For further information please contact:
Peter Williams, Executive Director, IMLA
Tel: 020 8390 5872 or email consultpwilliams@btinternet.com
Brian Thorn/ Sarah Davidson, Wriglesworth
Tel: 020 7427 1400
NOTES TO EDITORS
IMLA is the specialist trade body representing the interests of lenders who market their products primarily through brokers, rather than direct or through a branch network. The sub prime market makes up around 8% of the UK mortgage market and had a value in excess of £20 billion in 2005. Alongside that market is the self-certification market making up a further 10% and with a value in 2005 of around £30 billion. Both sub-prime and self-certification loans are almost exclusively sold via brokers rather than direct through lenders’ branches. Currently over 60% of mortgages are sold through intermediaries.
IMLA provides a unique opportunity for senior industry professionals to meet on a regular basis to discuss key current initiatives and contribute actively through IMLA and other fora such as the Council of Mortgage Lenders.
IMLA was formed in 1988 as the Association of Mortgage Lenders and was instrumental in the creation of the CML. It changed its name to IMLA in 1995. Subsequently IMLA helped bring the Association of Mortgage Intermediaries (AMI) into being and was instrumental in bringing the mortgage advisers qualification CeMAP to fruition.
More information can be viewed at the IMLA website www.imla.org.uk.
IMLA Management Committee 2009
Chairman
Godfrey Blight
Managing Director, Sales & Marketing
GMAC-RFC Limited
Directors
John Heron
Managing Director
Paragon Mortgages Limited
Tony Ward
Managing Director
Home Funding
Colin Shave
Chief Executive Officer
GE Money Home Lending
Bob Young
Managing Director
CHL Mortgages
Executive Director
Peter Williams
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