Call for brokers to take part in working groups

The Association of Finance Brokers (AFB) is forming a series of working groups to focus on three key initiatives during 2008, and it is calling on members of all sectors of the industry to contribute.

It wants the groups to look at raising standards across the industry, tackling PPI problems and supporting the introduction of new technology to the sector.

Robert Sinclair, director of the AFB, said: “We are determined to lead the agenda in the secured loans sector over the next 12 months and work with the industry to find solutions to the common issues we face. Ultimately, we want to bring all sides of industry together to create a more sustainable business platform that serves the interests of consumers. It is important for accreditation purposes that this involves both provider and professional bodies.”

Consumers bullish on buy to let

A significant 64% of people say they are no longer feeling the pinch of interest rates, according to Property for Life’s monthly investor confidence tracker – a 16% increase from January.

The proportion of investors who believe that now is a good time to invest in the property market is also at its highest level, having increased to almost 80%.

This confidence comes after the drops in interest rates in December 2007 and February 2008.

David Austin, managing director of Property for Life, comments: “Having waited several months for some respite, the two drops in the Base Rate are finally being passed from lenders to investors, demonstrated by the large reduction in those claiming to feel a pinch on their finances. The position of buy-to-let investors has been bolstered by those with high capital deposits, allowing them to take low loan to value mortgages and making them a safer bet for lenders than other borrowers. The high level of confidence in the market is important and is likely to be long lasting if we see another base rate cut in the next few months.”

C&G pulls from higher LTV lending

Lloyds TSB has confirmed it is dropping higher LTV lending products under its Cheltenham & Gloucester brand.

The lender confirmed that the decision was taken in light of changing market conditions and a communication has been sent out to intermediaries to advise them of the changes.

Eleanor Ross, media relations manager for Cheltenham and Gloucester, said the brand was behaving as a responsible lender and adjusting to a new market environment.

She added: “We sent a note out to our brokers last night that we will no longer offer mortgages at 90% loan-to-value from today.

“The reason we have done this is that we have never been well-known in this market and higher LTV lending has been a tiny part of the business – the average loan-to-value is 63%.

This demonstrates that we have always been a prudent lender. We look at our products and review them all the time.”

Property prices on the up

House prices in England and Wales increased by 0.9 per cent in January, according to the latest monthly figures from Land Registry, taking the average house price to £186,045.

However, annual house price inflation slowed to 6.4%, from 6.7 per cent in December.

The largest monthly growth was seen in the North West with an increase of 2.0 per cent, taking the average house price there to £139,362.

London saw annual price growth of 13.1 per cent, with the average house price for January standing at £357,976.

The volume of transactions was down on the same period last year, with an average of 100,648 per month in the months August to November 2007, compared with 117,173 per month from August to November 2006.

Conti merges with Anchor

Overseas mortgage provider Conti Financial Services and Anchor Mortgages have entered into a partnership. This is part of Conti’s expansion plans for 2008 enabling it to move to larger premises and increase its staff count.

The company will launch a new interactive website for clients and brokers, plus the provision of mortgages for foreign nationals purchasing property in the UK, and foreign currency mortgages. Brokers will have online access to confidential and customised pages to enable them to track their business immediately and accurately.

Simon Conn, sales and marketing Director, Conti Financial Services, said: “The merger of our two companies enables Conti to give clients direct access not only to our expanding overseas mortgage market, but also to competitive mortgage deals for the purchase of property in the UK domestic market, for both UK residents and foreign nationals. We’re also delighted to announce the launch of Conti’s new website, which brokers and clients will find more informative and interactive.”

Holistic approach needed on housing issues, says CML

Policymakers should develop a more holistic approach to housing market issues, according to the CML, which has completed a study of homeownership in the UK.

It found that a fifth of first-time buyers (people who are not currently homeowners) are in fact “returners” who have at some point in the past been homeowners. And around 15% of people moving into private renting in 2005-6 were previously homeowners.

In addition, a significant minority of people – around 10% – own a property that is not their current home, and this is sometimes instead of rather than in addition to their current home.

The number of second homes in England has risen by 30% over the past decade. Around 900,000 men and 1.2 million women are couples “living apart together”, who maintain their own individual properties.

Paul Samter, CML economist, said: “Given the considerable complexities of modern life and the increasing interactions across the tenures, perhaps it is time for the Government to develop a more holistic approach to housing market issues. A good starting point would be to focus on policies delivering an adequate supply of high-quality housing, assisting the mobility of households within and between tenures and an equality of treatment for those in need regardless of their tenure.”

Britannia holds steady despite drop in profits

Britannia Building Society saw a drop in profits in 2007, from £130m in 2006 to £115m, but saw an increase in group assets which hit a record £36.8bn.

It announced write-offs of £1.6m from Structured Investment Vehicles but had no exposure to US sub-prime mortgages or CDOs.

The Society stated that it has remained in good shape because of prudent management of the business during the current economic uncertainty. It says it has a secure funding position, is controlling costs effectively, maintaining high asset quality and has negligible write-downs on treasury investments.

Group chief executive Neville Richardson said: “At a time when the credit crunch is having a major impact on many financial services companies, we have delivered a robust performance. We have a strong balance sheet, our business model is solid and sustainable and our commitment to fairness will continue to serve our members well.”

The majority of the funds used for Britannia’s mortgage lending are derived from the balances of its 2.6 million savers – over 90 per cent of its unsecuritised mortgage lending is funded by retail rather than wholesale. Britannia has maintained levels of short-term liquidity and holds approximately four times the level of short-term liquidity required by the FSA.