Lender representatives appearing at yesterday’s Mortgage Business Expo London 2012 seminar session are broadly optimistic about 2013 lending levels with many believing the Funding for Lending scheme (FLS) will provide a significant and positive boost.
When asked what their predictions were for 2013 lending figures, representatives on the panel were predicting figures ranging from £140 billion to £150 billion gross and approximately £10 billion net.
Charles Haresnape, Managing Director of Aldermore Residential Mortgages, said the outlook looked generally good: “We expect to see a modest improvement in gross lending this year up to £135 billion. We are more optimistic about 2013 and believe we could see gross lending reach between £145 billion to £150 billion. The Funding for Lending scheme is improving liquidity in the market.”
Mark Snape, Sales Director of GE Money, was of a similar opinion with his gross lending prediction stating: “We will go into next year with some momentum. The market seems a lot more competitive and Funding for Lending has had a favourable impact on the market.”
Sarah Green, Head of National Accounts at Barclays Bank, said that she was less optimistic and believes it will be in the region of £140 billion to £145 billion. She added that the nature of FLS meant that lenders have to carry out more net lending otherwise they will get penalised; new competition may arise off the back of FLS.
The panel members also suggested that advisers and clients would start to see the benefits of the FLS in the provision of more competitive higher LTV products.
Ralph Evans, Regional Sales Manager at Halifax, said FLS is making a difference and predicted £145 billion of gross lending. He said: “Lloyds pulled down £1 billion from the scheme in September. We will start to see price movements in the higher LTV market.”
Richard Tugwell, Director of Intermediary Relationship Managers at Virgin Money, added: “We have been able to help 50 per cent more first-time buyers than last year. Many intermediaries have commented to us that for the first time in a long time all of the big lenders are competing for business.”
The lenders also suggested a positive future for mortgage advice and advisers following the results of the MMR rules.
Sarah believes that intermediaries now have a good clarified position and added that the new rules have “taken away that blood division between advised and non-advised sales”.
Ralph felt the MMR had brought clarity to the market and “strikes the right balance”. He welcomed the fact that advice was being recognised as the norm and only expected a minimum of execution-only deals to be completed under the new rules.
Richard and Charles both agreed and said that it has made advice a central part of the transaction, which has to be a positive move.
Charles felt the MMR “brings to the fore the intermediary position” and said that as there were no surprises in the new rules it indicates the consultation period went very well [a sentiment Lynda Blackwell, Head of Conduct Policy at the FSA also pointed out in her key speech yesterday].
On the issue of interest-only mortgages the lender representatives also felt the MMR was clear, however Charles acknowledged there was a danger that lenders could push back from the product even further.
He said: “The risk [with interest-only] is that lenders take a ‘flight to cover’ and I don’t think this is the right way to go. Some lenders have pulled out completely which is a very extreme way to go. Others have gone to 50 per cent LTV which makes it a niche product. If we’re not careful the lender community will go too far in the wrong direction."
By Jason McGee-Abe
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