At the latest industry debate on the mortgage market one of the key questions, posed by host John Wrigglesworth, was whether a housing boom is imminent in the UK, with access to funding for property purchase more readily avaiilable through government schemes.
Ceri Stanaway, of Which?, believes that the government incentives are good news, so long as they are monitored and don’t continue to detract from savings interest rates.
David Finlay, of Barclays stressed his view that the market is “edging towards genuine recovery” and a long way from experiencing a house price bubble, despite growing media debate and variation in regional property inflation.
HSBC’s Jonathan Byrne welcomed government steps to improve access to loans but struck a note of caution on market growth, which he said needs to happen at a pace the wider economy can support, while Robert Sinclair pointed out the difference between London, where the property market “never cooled”, and the rest of the UK.
With regards to best buy tables, Sinclair expressed the belief that consumers should share in the savings made by lenders who can go through intermediaries for lower rates. Referring to the potential for non-advertised ‘deals’ to be offered as a way to secure business that might otherwise be lost, he argued that this was “fundamentally wrong”.
More transparency and upfront information on pricing should be available for consumers, according to Stanaway, who claimed that Which? research had found that only 10 per cent of people could correctly rank five mortgages in order of cost over the term.
However, Jeff Prestridge, personal finance editor at The Mail on Sunday, pointed out that there are some “wonderful tools” to help consumers, while also arguing against the “manipulation of best buy tables by lenders and savings institutions” in order to get greater exposure for their products.
When the topic of a possible return of 100 per cent and self-cert mortgages was broached, Prestridge backed the return of the former, providing affordability is maintained, but said self-cert should stay in the past, branding them “an invitation to rampant abuse”.
Responsible borrowing and lending are the priorities for Ceri Stanaway, who suggested “products are not ‘bad’ in themselves – it is more important how they are sold.”
She felt consumers want a healthy, functioning market designed to ensure they can afford their debts.
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