London Mortgage Market In The Sun

There is not much that is better than London in the sunshine and a stroll around the City, (preferably in extra dark shades), reveals a great deal.

Gone are the worried faces of people rushing past, trying to get back to the office after risking a quick dash for a sandwich just in case the Euro has imploded again, or another banking scandal has sent shares falling, praying that in the minute or so they have left the desk, their entry card still works on their return.

Instead, people seem more chilled, lethargically sipping a beer at lunch, lying prostrate on the grass for half an hour’s snooze, laughing, people watching, dare I say it, happy even!

The newspaper headlines that litter the tube scream of House Price rises of at least 6%, whilst in our mortgage world First Time buyers are at their highest level since 2007, gross mortgage lending is up 26% year on year and lenders are still talking a good game.

In fact, in the London mortgage world the only issue is still around service, with several lenders still struggling with paperwork and valuations, so buyers who need to move quickly need to bear this in mind before following the best rate on paper.

We also have the little matter of “Help To Buy Part 2 – This Time It’s Personal”, finallyabout to be discussed by the Government and lenders. Whilst I of course want as much help as possible for the market I must say I am still a little stuck on this one.

Firstly for it to work properly should there be capital relief for lenders? If not, will lenders actually have the appetite to engage fully?

Perhaps even more importantly, there is the little question of lenders actually being able to cope. Let’s be honest, lenders are seemingly struggling with increased demand as it is now, so how will even more demand for lending be dealt with? What about valuers and the issues they are having, how will they keep up when we are already waiting 4 weeks plus in some areas?

Lenders also need to set up systems to effectively police the new scheme so will they be ready in time? If the Government also insists on a separate set of underwriting principles underpinning this project, will that confuse matters further?

Finally, where the hell are all these properties to buy anyway? Surely prices will just rise further?

I am sure there are perhaps other things that can be done to assist. For example, one reason people are not moving, especially at the mid to high end of the market is because for the same cost of stamp duty you can get a decent extention. So some kind of Stamp Duty reform is long overdue.

Anyway, whilst those with savings continue to rightly feel hard done by as interest rates stay at record lows, buyers and those looking to remortgage should be taking advantage of this unique period of time to lock in at low rates. It will not last forever.

So, although there are still questions around the sustainability of all of this, bubbles being created in both the housing and equity markets, after the last few years surely we have every right to continue to enjoy the positivity and bathe in the sunshine. It is a welcome relief.

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