Non-conforming FTB numbers down
The research also indicated adverse credit levels were rising; due mainly to the traditional post-Christmas financial ‘hangover’, but the average amount of capital borrowed by non-conforming clients in January was down to £111,750 from £113,877 in December.
The January drop in FTBs has been offset by the continued growth in remortgaging, which Advantage expects to be the mainstay of the non-conforming market in the near future.
Keith Dearling, managing director at Advantage, believes brokers must adapt to these conditions: “As the housing market is not forecast to show signs of considerable growth in the coming year, remortgages will continue to grow and having seen the reducing levels of first-time buyers dropping even further, lenders need to consider product ranges to allow this pent-up market to grow once again.”
Much of the new remortgaging business in the non-conforming market is attributed to consumers attempting to cope with personal debt and the overall slow growth in the wider economy, as well as consumers switching to take advantage of fixed rate deals.
Advantage predicts the overall growth in the non-conforming market is set to continue and brokers need to be ready to deal with a surge of non-conforming business.
Mike Pendergast, IFA at Zen Financial Services, is less optimistic. He said: “Most cases tend to be remortgages as there seems to be very few mortgage applications with adverse credit but things have been fairly steady at the minute. We haven’t seen a massive rise in the area but as underwriters get more choosy about what they accept in terms of prime cases, this may affect the level of adverse business around.”