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New mortgage market tracker report reveals how many applications are successful
Almost half, 47%, of enquiries to intermediaries about getting a mortgage in the UK resulted in a completion during the third quarter of 2015, according to a new Mortgage Market Tracker report. The quarterly tracker from the Intermediary Mortgage Lenders Association (IMLA) shows how many enquiries result in applications, offers and completions, as well as dropout rates, those attributed to lender declines, and the wider issues of intermediaries’ confidence in the business outlook for the mortgage industry, the intermediary sector and their own firm. The data from this first report also shows that 67% of initial borrower enquiries led to an application, 83% of which then received a lender offer. A similar percentage of offers, 84%, then reached completion. The largest percentage of dropouts occurred during the initial stage, with 33% of borrower enquiries not leading to an application. Intermediaries attributed 27% of all dropouts, equivalent to 14 in every 100 enquiries, to lender declines, with the remaining 73% of dropouts coming from client or broker withdrawals. The largest firms, those with more than 11 employees, and sole traders both outperformed the industry average of 67% converting enquiries into applications, with 70% of consumers progressing through this stage. Once a borrower submitted an application, sole traders achieved the highest rate of offers at 87% compared to an average of 81% and subsequently completions at 88% compared to an average of 84%. However, the smallest firms also reported the highest rate of dropouts due to lender declines at 35%, compared with an industry average of 27% and significantly higher than the decline rates reported by the larger firms. ‘The intermediary channel has never been more important to the UK mortgage market, with consumers and lenders both increasingly relying on brokers to match individual needs to suitable products,’ said Peter Williams, IMLA executive director. ‘Regulatory changes have brought new assessments and criteria to contend with, but this data suggests the majority of applications are getting the green light. It also shows that brokers are playing an invaluable role in the earlier stages by assessing borrowers’ circumstances and providing realistic advice and recommendations,’ he explained. ‘The advantage of a competitive marketplace with a range of mainstream and specialist players is that a decline from one lender does not necessarily mean the end of the road. Rather brokers will work to secure alternative mortgaging opportunities. As this suggests, positive customer outcomes rely on lenders and brokers working together effectively,’ he pointed out. ‘After a period of fundamental change, it is encouraging that intermediaries are upbeat about the business outlook, which bodes well for consumer access to mortgage finance. By tracking the mortgage pipeline, we hope to provide useful data for both lenders and intermediaries to help fine-tune the process and ensure a positive experience for consumers,’ he added. According to Brian Murphy, head of lending at the Mortgage Advice Bureau, brokers… Continue reading
Investment in European commercial property up 18% year on year in Q3
The level of investment into European commercial real estate continues to grow with €62 billion invested in the third quarter of 2015, up 18% on the same period in 2014. France experienced the most noteworthy increase with investment activity of over €7 billion, almost double that of the same quarter in 2014, according to figures from CBRE. French investment activity was dominated by domestic investors who accounted for more than 70% of CRE investment in the third quarter, and who typically favoured large offices located in the Paris CBD. Whilst France benefitted from the biggest change in investor sentiment, it was Germany which saw the greatest increase in absolute terms, with quarter three investment of €14 billion, up €5.6 billion on the same quarter last year. The report points out that the €36 billion already invested in German commercial real estate in the first three quarters of this year is 40% higher than the equivalent period in 2014. Alongside France and Germany, several other countries experienced a strong third quarter. Norway and Sweden saw investment volumes grow by 139% and 68% respectively on the third quarter of 2014. Southern Europe also performed well, with Portugal and Italy benefitting from a slight shift in investor focus away from the Spanish market. Belgium attracted near record levels of investment in the third quarter, boosted by several large retail transactions. In Central and Eastern Europe, Poland, the Czech Republic and Hungary saw the most investment activity. At a city level, the most notable aspect was the move of the Nordics up the table of Europe’s largest CRE investment markets with Oslo, Copenhagen and Stockholm making the top 10. Typically these Nordic capitals have very high levels of domestic investment, around 70%, with cross-border European investment accounting for around 25% and just 5% of capital coming from outside of Europe. However in the third quarter foreign investment accounted for more than half the total in both Oslo and Copenhagen. London and Paris continue to fill the top two spots in the league table, but interestingly all five of the main German markets make it into the quarter’s top ten for the first time since the first quarter of 2013. ‘We have seen good growth across the European commercial real estate investment market in the last quarter. With high levels of transactions expected in the fourth quarter, this current trend is set to continue and we believe we will see a strong year end in terms of investment volumes,’ said Jonathan Hull, managing director, EMEA Capital Markets at CBRE. ‘Retail recorded the strongest levels of investment growth this quarter up 45% on the third quarter of 2014, the second highest level we have seen in 10 years of data. The office sector also performed well across the region, underscored by some significant transactions in France, the UK, Norway… Continue reading
New standard format mortgage charge tariff launched in UK
A new tariff of mortgage charges has been launched in the UK that introduces a standard format for how lenders communicate their fees, to make it easier for customers to understand charges and compare deals. Following a campaign by consumer organisation Which? to end the confusion around mortgage costs, the Chancellor of the Exchequer George Osborne asked the Council of Mortgage Lenders and Which? to work together to find ways to make it easier for consumers to understand and compare the costs of different mortgages with different lenders. Since then they have worked jointly to address this problem and believe that the new tariff to help make it easier for people to understand mortgage fees and charges. There are two key improvements within the tariff. Firstly there will be standard terminology. Different lenders will now use the same names for fees, as Which? research previously found consumers find the existing range of names for similar fees too confusing. Secondly it introduces a new common format. Each lender will list fees in the same order, and with the same descriptions, to make it easier to compare between lenders. The new tariff has been tested on consumers, and results show that they found it much easier to understand and compare costs than when they used existing versions. Lenders representing 85% of the market have already committed to introducing this tariff and putting it on their website by the end of the year, and we anticipate that other lenders will also choose to adopt it. Continue reading
