Archive: Wed Nov 2016

As we wind down the year and look ahead to 2017 and what is likely to be another interesting 12 months for the mortgage market, it is a good opportunity to look back at what has been an eventful 2016.

Whether dealing with the impact of a scheduled change in housing policy, or reacting to surprise announcements, we have remained resilient and worked together to ensure you are up to date and able to provide the same first-class advice to your clients.

But what events had the biggest impact on the mortgage market and how do they fit in with other alterations facing the industry?

March: Mortgage Credit Directive (MCD)

Put in place to create a framework of conduct rules, the MCD is a piece of European legislation designed to foster a single market to protect consumers across the continent. The requirements came into force on March 21^st and lenders then chose to either move straight to a European Standardised Information Sheet (ESIS) or a KFI+ on a temporary basis.

But now that the UK has voted to leave the EU, the MCD has become another future consideration for the market. Experts now believe that the MCD could well be up for negotiation following Brexit, with some calling for it to be integrated into the exit strategy by the Government and to use the opportunity to implement a set of rules better suited to the UK market.

April: Changes to Stamp Duty Land Tax

When it was announced that the stamp duty surcharge on BTL and second homes would increase by 3% on 1^st April 2016, a surge of investors pushed to ensure their deals were completed before the deadline. This was a big move by the government, with relatively little warning to the market given it was only announced in the 2015 autumn statement.

But despite industry predictions that the change would greatly curb the BTL market, the sector has remained buoyant and an October report from Rightmove shows that BTL enquiries are up 30% since May’s slight slump following the rush.

June: EU Referendum and “Brexit”

Despite only representing the decision to leave the EU, the shockwaves of the referendum result reverberated around the country and left many pondering the effect the eventual activation of Article 50 could have on the mortgage market. What did follow was wild fluctuations in sterling, stock prices and shifts in consumer confidence.

But advisers have generally found that consumer appetite remains strong despite the uncertainty that followed the Brexit decision. It is likely that we as a nation will have a better understanding of the possible effects that the actual exit itself will have on the industry, once it comes closer to realisation.

October: PRA Paper on Underwriting Standards

Technically known as the CP11/16 paper, the Prudential Regulation Authority’s (PRA) announcement followed a consultation on underwriting standards within the BTL market released in March 2016. Since the release of the official document in October, many have been looking at how these standards will fit in with the other BTL changes, such as stamp duty and next year’s changes in tax relief.

Now that the PRA have issued its supervisory statement on BTL underwriting standards, relevant firms will now have to apply affordability testing and use a sufficient Income Cover Ratio to determine whether personal income is adequate to cover mortgage repayments.

December: Help to Buy 2

With confirmation that Help to Buy 2, or the Help to Buy: Mortgage Guarantee Scheme, is to be concluded at the end of 2016, many are looking ahead to the market and asking whether first-time buyers will be sufficiently supported going forward.

Despite the forewarnings of when each branch of Help to Buy would end, there has been some confusion over whether all Help to Buy schemes are ending. The good news is the Help to Buy: Equity Loan Scheme still has several years left and early signs signify that lenders are now offering high LTV mortgages, which experts hope will negate the impact on the market of ending Help to Buy 2.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.

The Melton Building Society and its subsidiary MBS Lending have joined the Mortgage Intelligence lender panel. The new partnership will see both network and mortgage club members given access to the Society’s flexible approach to lending and niche product range.

The Melton offers a range of residential mortgages up to 95% LTV for purchase and remortgage, alongside niche lending products which include buy-to-let, holiday let, self-build, shared ownership and short-term lending, with credit repair mortgages offered through the MBS Lending brand.

Nicola Alvarez, director of sales and marketing at the Melton, said: “Our flexible approach to lending offers a compelling alternative for Mortgage Intelligence intermediaries with personal underwriting supported by a dedicated broker support team and innovative niche products to meet the varying needs of customers.”

Sally Laker, managing director at Mortgage Intelligence, added: “We are delighted to have further enhanced our lending panel by adding The Melton Building Society and its subsidiary MBS Lending. These latest additions further demonstrates our commitment to delivering a competitive and comprehensive panel, which is reflective of the market and the needs of both our Appointed Representatives and Directly Authorised members.”

ENDS

For further information please contact Jane Gilhespy, Communications Manager, the Melton on 01664 414141 or email j.gilhespy@mmbs.co.uk.

Note to editors:
The Melton Group incorporates the Melton Building Society, MBS Lending Ltd and MMBS Trading Ltd. Established in 1875, Melton Mowbray Building Society is a mutual building society with branches in Melton Mowbray in Leicestershire, Grantham in Lincolnshire and Oakham in Rutland. The Melton is the 25th largest building society in the UK. The Melton offers mortgages, savings and insurance and investment solutions.

About Mortgage Intelligence Holdings: Mortgage Intelligence Holdings was acquired by Countrywide in April 2011, the UK’s largest mortgage broker and property services Group. The following brands operate under Mortgage Intelligence Holdings.

Mortgage Intelligence and Mortgage Next: Established in 1996, Mortgage Intelligence, which merged with Mortgage Next in 2009, has become one of the UK’s leading mortgage networks. They offer award winning mortgage and insurance services to over 400 appointed representatives. Both networks focus on high quality of service and support offered to their intermediaries.

FYB Network: Mortgage Intelligence Holdings acquired Life and Easy trading as FYB Network in September 2012. FYB’s brand joined Mortgage Intelligence and Mortgage Next brands under the umbrella of Mortgage Intelligence Holdings Ltd. They offer both mortgages and insurance services. They were originally founded in 2004 and became a fully authorised network in May 2007.

Next Intelligence: Next Intelligence launched as a new brand in April 2011, bringing together Mortgage Intelligence and Mortgage Next’s directly authorised clubs which were both established in 1996. They offer premium brokers services to over 3500 mortgage intermediaries including mortgages, general insurance and a new protection panel which was launched in September 2011.

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