Amongst all the conflicting news and views around at the moment, there seems to be a strong level of consistency where the large loan mortgage and property market is concerned. At the £500,000 plus level for mortgages and the £1m plus level for property, activity has been relatively strong for a while now.
It has always been the case that the top end of the market seems to move six to nine months before the rest of the market, so the question is how long it will take this time before the activity begins to trickle down to the rest of the market.
It is in the million-plus market that a lot of properties are still being sold; these are generally the clients with large amounts of equity, and although many start off suggesting that they are cash buyers, once they see the really attractive mortgage rates on offer many decide to finance at least part of the purchase so they can use their cash in other ways.
Also, many City employees have had their basic salaries increased and less is paid in bonuses, which makes them more attractive to the lender.
This heightened activity in the High Net Worth property sector is matched by the biggest area of movement in lending terms, in the large mortgage loan arena, where lenders like lending to those with at least a 25% deposit and a decent income.
At this level products such as a 2.99% base rate tracker, a 3.99% 2 year fixed and a 3.25% variable with no penalties offer a superb incentive for those looking to borrow above £500,000 to take advantage of lower house prices and not tie up all their available cash.
It is mainly the Private Banks who are able to offer these exceptional products, together with the service and understanding of client’s circumstances that is needed at these levels, and offshore loans, currency management and all manner of weird and wonderful bespoke products can be arranged with the minimum of fuss.
However, mainstream lenders are also slowly beginning to pop their heads above the parapet and offer a greater choice, whilst slowly increasing the Loan-To-Values that their best rates are offered at.
With bonus levels set to be maintained it looks as if demand will only increase as many look to take advantage of lower prices and historically low interest rates.
This could be one of the most important signs yet that the housing market is starting its’ long and difficult journey to recovery.