Newsletter May 2015

MMR Twelve Months On

The Mortgage Market Review (MMR) was introduced in April last year as part of the new affordability rules brought in as a measure to ensure borrowers could afford their mortgage payments. Twelve months on, it’s impact has not had not been as dramatic as first anticipated.Gross mortgage lending reached £16.5 billion in March 2015, an increase of 21% compared to February (£13.6 billion) and 7% higher than March last year (£15.4 billion). Such figures are encouraging, where first time buyers and home movers continue to be instrumental in driving growth and, coupled with the recent stamp duty reform, lending is predicted to grow over the coming months.

Riding High – Help to Buy Mortgage Guarantee Deposits

Figures released from the Mortgage Advice Bureau, reveal the average deposit using the Help to Buy mortgage guarantee scheme (HTB2), peaked in February, the biggest increase seen since April 2014. Prospective borrowers put forward an average deposit of £9,936, up by 9.2% on January 2015.This is most welcomed news for the market as a whole. Such schemes have boosted higher loan-to-value (LTV) lending, where there has been a notable rise in 95% mortgage products now widely available to those who can only muster a modest deposit. Furthermore, the upcoming HTB ISA will reduce the amount of time required to save for a deposit.

Such factors have undoubtedly helped many first time buyers “stand on their own two feet”, where recent research undertaken by the Clydesdale and Yorkshire Bank’s Annual first time buyer survey, show the number of first time buyers relying on the “Bank of Mum and Dad” has fallen dramatically.

The Mortgage Price War Switches to Buy to Let

Recent research undertaken by Paragon, the buy-to-let specialists, has highlighted fixed rate mortgages remain the most popular choice, with a total of 79% going through advisors. There is also increased appetite for longer-term headline rates, where 30% of cases accounted for five year fixes or more in the first quarter 2015, up 26% from the fourth quarter in 2014.With lenders beginning to show a degree of flexibility in their lending practices, the need to limit borrowing to only those with high deposits and good equity is steadily deteriorating. Coupled with record low mortgage rates, a flurry of would be landlords is expected to capitalise and take advantage of such an unprecedented situation resulting in more new purchases and investment opportunities.

Company News

We are delighted to announce First Mortgage achieved its best month ever for written business in April, reaching a total of £762,610 from 568 mortgage cases, which is encouraging for the company at this time in its development cycle.Such an achievement is a result of the sheer hard work and dedication of the strong advisory team now firmly in place. It also sends a positive message that demonstrates our commitment in helping first time buyers take that all important step onto the property ladder.

Antony Stackhouse, head of sales and operations, commented:

“April has been a record breaking month in terms of new business written with us breaking the best week ever and the best month ever. It’s heartening to see that this comes from a combination of factors. Our teams are seeing more customers at sign up week in week out and we are now showing signs of consistency and they are getting better results in getting protection recommendations accepted.  This is especially pleasing as it suggests we are taking our social responsibility even more seriously and ensuring our customers are better equipped to make good protection decisions.” 

Meet the Advisor

This month we meet Sam Kong, a mortgage and property consultant based in our Tollcross, Edinburgh office.
 Tell us about your job and what’s involved on a typical day?There can be a real mix from day to day. I’m in the office for around 8.45, with a few emails on the commute in and a morning stroll across the Meadows to start my day. Every day and every client is different, usually it’s four meetings a day, as well as meeting a lot of interesting people from all walks of life and all over the world. It’s a mix from meeting new people and helping them understand how to go about buying a home to established landlords looking to add to their portfolio and everything in between, and it’s nice to have that variety. I’ll normally finish around 5.30, head home and get my son to bed and spend some time with the family, and catch up on anything else that needs done that day.

What previous roles and experiences led you to your present position?

I worked for the Bank of Scotland for just over 11 years, starting on the cash desk and moving to mortgages in 2004. I’ve done all jobs there really which gave me a good experience and worked in the branch side, with commercial and Private Banking clients and a lot of time with the self build team there so feel I served my time!

What do you like most about this company?

After coming from a big corporation it’s refreshing to be with a smaller company that holds the same level of professionalism as a large bank, but small enough where every member of staff and client matters. It’s also amazing to me just how many people come through that have been referred by friends, family and co-workers and really makes you proud of what we do day to day.

What do you consider the key challenges for the mortgage industry this year?                            

I think one of the biggest challenges has always been public perception of the housing market, not always helped by the media being very London focused! Even with increases in house prices owning a home in Scotland is still very affordable, particularly with schemes like Help to Buy and LIFT available. We constantly see people who have been renting for years amazed at what a mortgage costs compared to their rent, and often it’s only once a friend has stepped on the property ladder they decide to look themselves.

What are the most important personal satisfactions and dissatisfactions connected with your job?                 

It’s always great to see a happy client, and being involved in such a big decision in someone’s life can be very rewarding. It’s easy to forget how much it means to someone to buy their first home and the freedom (and fear!) that can bring. I always try and think back to how I was when I bought my first home and how important it was to get the right advice.

There can be frustrations, like if a lender declines a client for something you disagree with, but the difference with having access to over 10,000 products is you usually have a plan b or beyond, and with experience you start to learn which lenders are right for which clients quickly!

Who is your role model and why?   

That’s a tough one because we all have our faults! My Granddad was a huge inspiration to me, someone who managed to work hard enough to put 7 kids through school from Trinidad to the UK and still be a great father to them. He was a pharmacist by trade but he was someone who just loved learning about anything that took his interest and never lost his love of life.                                                                                   

If you could take back one career decision, what would it be?

I decided management wasn’t for me, but only after a seemingly never ending series of half day courses. I will never get that time back!     

If we were to ask your work colleagues about you, what would they say and why?

Nothing bad I hope! Probably a mix of my sweet tooth, the amount of water I drink and the amount of useless knowledge I retain.

If you could take three other people to dinner with you, who would it be and why?

With the election being the main topic as I write this, I’d probably say Ed Miliband, David Cameron and Nicola Sturgeon, in the hopes that after a couple of drinks they may actually say what they really plan to do without the hyperbole!

For company and conversation though it’d have to be:

David Attenborough – The man is a living legend. I love watching the documentaries he makes with my son, Matthew, and he just seems to have this amazing knowledge and infectious enthusiasm for life.

Luis Suarez – Controversial yes, and have to stay out of bite’s reach, but as a Liverpool fan he has been I think the best player we have had in my football watching life. It’s going to be a better story than going to dinner with Michael Owen isn’t it.

Scarlett Johansson – Because I’m pretty sure my partner, Tracy, won’t read this.

Salad or chips?

I’d say salad, but I’d be lying.

What are your hobbies?

Things I used to have before I had a kid! Wouldn’t change it for the world though.

What is your favourite film?

Raiders of the Lost Ark

Who is your current mortgage with?

Halifax, although my deal is up soon…..



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