Gemma Harle's Blog
Gemma Harle, Tuesday, 15 March 2011
Gemma Harle is managing director of TenetLime
In the circle of hell that is mortgage lending, last month’s 26% fall in house purchase lending caused an even greater gnashing of teeth and wailing from the industry’s lending body the Council of Mortgage Lenders. Their data showed 28,500 loans were advanced for house purchase in the month, worth £4.2bn - a drop of 29% by number and 26% by value on December.
Of course while the extraordinary weather played its part, their view appears to be that these numbers reveal some dire economic factors at play.
From the lenders’ point of view you can see why this looks bleak but numbers alone do not tell the whole story.
For many brokers it does not feel as bad as these numbers would have you believe. Those left standing are in many cases enjoying a larger share of an admittedly smaller mortgage pie but have also succeeded in growing their protection and general insurance sales significantly. What’s more, if surveying volumes are reliable indicators of future business, we should enjoy a buoyant February and March too.
Lenders are helping too. They realise that direct distribution has flaws, not least its inability to cross sell product and deliver quality volume mortgage business.
Recent high profile criteria change are one tacit admission that to do business you have to give the intermediary sector good products. I expect more will follow.
It may yet all come to a grinding halt. We still have a dysfunctional if more active lending market but, on the evidence from the coal face to date, it’s too early for judgement day.
