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Weakening in housing market may be coming to an end, says Bank of England


The number of mortgages approved for house buyers in December rose slightly to 60,275, higher than in November but 17 per cent down on December 2013, according to the Bank of England. As this is the first rise in mortgage approvals for six months, it suggests that the weakening in the housing market may be coming to an end.

In another survey, the Bank of England reported that mortgage approvals for remortgaging were lower than at the start of the year. This is surprising when you consider how rates have continued to fall to record lows. However, the introduction of the mortgage market review last April contributed to a slowdown in the market with tighter criteria making it more difficult for many borrowers to get funding. Some of those who are coming up to remortgage in particular will have been scared off doing so by the negative coverage and may be prepared to sit on a higher standard variable rate rather than risk being turned down by a lender.

According to the Bank of England, lenders don’t expect mortgage rates to fall significantly in coming months. This is no doubt because they are already so low, so borrowers holding off and waiting for them to fall further might want to consider securing a rate now. Rather than cutting rates further, we expect lenders to turn their attention to criteria and it would be welcome to see some easing on this front this year, particularly for older borrowers.

If you have any concerns or questions about funding, do get in touch.

Adrian Anderson
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Adrian Anderson

Wealthier borrowers not immune to new mortgage rules


Private banks are imposing tougher rules on mortgage lending, making it trickier for wealthier borrowers to get funding.

Regulatory requirements, introduced via the Mortgage Market Review last year, are forcing banks to put the borrower’s affordability under much greater scrutiny. Subsequently, asset-rich but cash-poor applicants are increasingly finding that they don’t meet these tougher criteria, whereas 12 months ago their mortgage might have been approved without any issues.

Those private banks which are part of a larger banking group are often most susceptible to this as they are more likely to have a ‘one size fits all’ approach. But even some of the smaller private banks have a diktat from the Financial Conduct Authority that they need to have a policy on affordability. They are having difficulty fitting clients into the structure.

Much of the response from some private banks is a kneejerk reaction to the relatively new rules so we expect over time that things will settle down. However, in the meantime borrowers are likely to find it harder to get a mortgage.

In this trickier funding climate, advice is paramount. Borrowers should get organised and look at all their various sources of income. They should pull together statements for any income-generating investments, and consider ongoing income, pension schemes etc.

Borrowers must be on top of their game and have all this information to their fingertips. They have to help the private bank by demonstrating that they can draw income from investments or other sources so that the bank can see evidence of affordability.

To discuss your financing options, please get in touch.

Jonathan Harris
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Jonathan Harris

FT Money Show: Anderson Harris discuss mortgages for wealthy borrowers


Anderson Harris director Jonathan Harris was delighted to be asked onto the FT Money Show this week to talk about the slowdown in the mortgage market and how wealthy borrowers are also finding it tougher. Jonathan discussed the rigid interpretation of the mortgage market review rules by lenders, including the private banks, and how it has become trickier to secure funding.

However, the outlook for this year is encouraging with some excellent deals available and interest rates set to stay low for the foreseeable future.

Click on the link to listen to Jonathan’s appearance (from 5.58mins in):

Jonathan Harris
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Jonathan Harris