Consumers are still valuing the services of mortgage brokers and intermediaries to advise on, and process their mortgage applications. Council of Mortgage Lenders’ data shows that during the first six months of this year mortgage brokers were responsible for 61% of all new mortgage business, worth £33.9bn and involving 247,000 transactions.

Yet again today we have had to tell a first time buying couple that we are unable to help. Between them they earn £50,000. They have a 10k deposit and need a 95% ltv mortgage so that they have enough to cover fees etc. Both of them have done what was asked of them by the government. They went to university – (did Blair not say education education education) and got into student debt. Notwithstanding that they have still managed to save 10k. Now I my book that makes them a good risk. They are well educated with good jobs, and have shown commitment by saving up a decent deposit.

To repay them for their participation in society, lenders egged on by the FSA and government/consumer groups/charity meddlers et al, have all but stopped lending on 95% ltv deals. Sure there are a few exceptions, and a few cock eyed schemes requiring your parents to stand guarantor or put the family estate in hock as security, but for most young people the market has simply turned its back and shut up shop.

If the housing sector is to remain stable it needs first time buyers. Real ones. Young people who are starting out and who are trying to participate in society, oiling th wheels of the market.

The least, the very least, lenders can do is to do the right thing and get some decent affordable product out there. Without it we face the prospect of social exclusion and economic stagnation.

Latest Research shows that mortgage rates and cost of funding to lenders through the swap rate market is at an all time high, yet lenders still insist on large deposits and lending criteria that prohibits the average Joe getting onto the housing ladder, which is core to the sustainability in the growth of the housing sector.

The average rate of a two year fixed rate mortgage is currently 4.55%, while swap rates stand at 1.26%, this looks like the banks are desperately trying to adjust their balance sheets and give themselves a much needed annual bonus, after all Christmas will be upon us soon.

Sell yourself at auction - its easier than you think!

Last weekend the consumer comparison website moneysupermarket sent out a press release to the effect that lenders where giving their best deals directly to consumers – meaning not via brokers – and that they (moneysupermarket) interpreted this as lenders showing that they saw little value in using brokers. It also said brokers offer less choice.

Both of these points have substance. Firstly, yes, its true in some cases, with limited funds lenders are keeping the best deals for direct or existing only customers- however they may require you to open a bank account or use it as an opportunity to make money out of you elsewhere if the mortgage deal is priced too cheaply. And secondly, for the same reason, many lenders are not seeing the need to support brokers whilst they have little appetite to lend and limited funds.

As for choice, according to Trigold, a service that monitors and provides whole of market mortgage data information for brokers says that there are more 3,800 broker mortgage deals and just 1,400 direct deals. So it seems that moneysupermarket are being sparse with the truth?

There are however some important caveats. Firstly, some mortgage deals are only available from brokers as there are many lenders who only deal through brokers. And secondly when lenders decide they want to lend again and have funds, the broker will once again be their best friend and the best deals will be available through brokers.

In fact a development manager for a large building society confided in me just last week by saying that although they have put the best deals in branch the staff have no clue on selling them at any price the staff are just not as knowledgeable as the average broker.

Anyway, back to my point.

Money supermarket earlier this week then withdrew the press piece saying that it may contain errors and that they fully support the broker market. All a bit strange coming from an independent consumer comparison website?

The truth is that once you go browsing on moneysupermarket and make an enquiry its highly likely you will get a call from a broker – and not one that’s employed by moneysupermarket – that will have paid for the “lead”. Yes, moneysupermarket and many other similar websites make a substantial income from creating interest via websites then attracting enquiries from consumers. They then sell these “leads” to the highest bidder through “lead” sales companies, normally for around £25 per lead.

Two very large purchasers of these leads, Personal Touch Financial Services (PTFM), and Tenet have decided to review their support of moneysupermarket – in fact at the time of writing PTFM have severed ties.

So then it’s no surprise that moneysupermarket have withdrawn their press release. Money talks.

What can we draw from this? Firstly moneysupermarket, whilst comparing the whole market are happy to sell you to the highest bidder – even if the highest bidder does not have access to the whole market, or has is even best placed to proved financial advice. (Although this is not the case with PTFM or Tenet – both are very reputable)

Secondly, they are not prepared to stand by what they say when it gets in the way of profit and loss,

And thirdly, be careful when giving up your details on websites – there is nothing wrong with websites that advertise mortgage advice and pass the details to an expert firm, just as long as you know.

I am pleased to announce that Obligo has been authorised by the Financial services authority (FSA). The process has taken almost 6 months to complete as the checks and balances are now much more robust than in previous years. As we edge ever closer to launching to the market milestones like this one pass with ever increasing speed. By the end of July we will be unveiling the clever parts of the obligo website - the parts that will set Obligo apart as an innovator and game changer in the mortgage and property business. In a difficult and challenging market there are opportunities to change the way things are done and to do things better. That is what Obligo is all about.

Today Chancellor George Osbourne will announce an austerity budget designed to whittle away at the UK PLC deficit, currently standing at a vast £155 Billion. The expected package of cuts and taxes will affect everybody if the media and hype is to be believed. For the last few weeks the coalition has been softening us all up with constant leaks to the media about how harsh they will need to act in order to pay our collective debts - the thinking being if we expect armageddon but get just get third world war, we will all think we have got off lightly.

For the property market and mortgages, the future is still rather unclear. Last week Mr Osbourne addressed the Mansion House and announced the demise of the Financial Services Authority (FSA) for failing to identify and act on problems building up in the financial system. Then, in an amazing and quite confounding turn of events announced that Hector Sants, the boss of the FSA, is going to be hired as the Deputy Governor of the Bank Of England. The same Hector Sants that presided over the biggest financial collapse of the modern era. What can we conclude from this? Well,  maybe the new job is a fitting and just punishment for failure? Or, as i suspect its jobs for the boys - either way it looks like dirty politics, the like of which we were promised had gone for good.

The bad news at the heart of this is that Sants and Co (this guy earns £724,000 PA according to the financial press) seem to believe that mortgages should be rationed and only given to people who have big deposits with conventional lifestyles, impeccable credit ratings and so on. In any other part of society this kind of approach is called descrimination - and as such is quite rightly being purged. People like Hector Sants and the chair of the FSA, lord Turner who are advocating this epic bout of consumer descrimination are largely going unchecked and that is something that should worry us all.

If you are one of the millions who Sants and Co are looking to engineer out out of the mortgage and property market, your apocalypes is coming soon to a bank or building society near you when the new proposed mortgage rules come into force. You could well find yourself stuck in a mortgage deal with no way out. If you don't have a mortgage, you may find you struggle to find your way in. Either way the story is not good.

If you feel poor and neglected, and excluded now, you ain't seen nothing yet!

Today i hear that Barclays Bank have done a deal with new house builder, Bovis, to offer buyers 90% loan to value mortgages on new properties through its Woolwich mortgage brand. The significance of this should not be lost on the market overall.

Over the last few years lenders have sustained losses on new build properties through either fraudulent deals or because some new properties were sold at inflated prices during the boom times. When those properties were subsequently reposessed by lenders then sold on, the values were no where near the price when sold new. The net result of this was most lenders deciding they would restrict the amount they would lend on new properties in relation to the sale price. In most cases lender where restricted these loans to around 65 to 70 % loan to value.

For property developers this has been a disaster. Most new homes are purchased by buyers who require a mortgage, and in many cases, a mortgage above 60 to70% loan to value. As a result many properties have remained unsold, with many developers going bust through lack of sales.

Today the Barclays/Bovis partnership may herald a new era of co-operation that will help oil the wheels of the market.

The devil will be in the detail of course, and i wait to see just what the detail is but this appears to be a genuine effort to get the market functioning again.

After two years in the doldrums, buy to let mortgages are back as Obligo launches a new, market leading 80% loan to value buy to let mortgage with rates from just 4.69%

Landlords across the country are given hope after a gutsy UK mortgage lender, The Mortgage Works (TMW) launches an decent range of Buy to Let mortgages lending, upto 80% of a properties valuation.

So what does this mean you cry?

According to Chris Gardner of Obligo – that’s me, buy to let is a good indicator of the overall trend in mortgage lending. When asked by a press pal of mine I said “Buy to let was the first of the main mortgage markets to fold under the pressure of the credit crunch. With TMW taking the lead and upping the loan to value ratio to 80% is a good sign that competition may be returning to the market, and more importantly it’s a good sign that lenders may once again have an appetite to lend.”

Of course time will tell, and I am far from being mortgage soothsayer, but lets hope this is the start of something good. 

Ask anybody involved in mortgages and they will tell you that there is virtually no remortgage market at present. The only mortgages being arranged are those for purchases, and whilst things have picked up, the market is still rather quiet. With spring upon us one would hope the market would start to see signs of recovery from the doldrums. However with an election and mortgages still rather tricky to find on good terms it might be a slow recovery.

That said, there are still buyers out there, property is changing hands, and deals are being done which brings me onto a subject that rarely gets much of a mention in the medias endless column inches that are written about mortgages and property - Lawyers.

A good property conveyancer or lawyer can be the difference between a transaction failing or completing so why is it that time after time people choose their lawyer based on price or the one that was recommended by their estate agent?

From bitter experience I can tell you that selecting the wrong lawyer can cost you money and in some cases even the deal.

A friend of mine who is an experienced banker, so he should know better, recently told me over a pint that the property he was trying to by had in fact be whipped from under him as he had not got to contract stage quick enough. The strange this was he did not seem to understand why?

When I asked him he told me that his solicitor had only opened his file and had not done anything except to write to the seller’s solicitor. When I pressed him on it, he seemed to take the outmoded view that he could not push or jostle his lawyer as he was an esteemed professional and that’s not how you deal with legal people.

I pointed out to him that as a result of his lawyer’s very parochial outlook and ways of doing things, he had lost the very house he had tried so hard for 6 months to buy. He looked very uncomfortable and conceded that his choice of lawyer was not the best. What surprised me was that in his day job as an investment banker he dealt with full on city lawyers every day of the week and was a pushy go getter, not the pussy cat he had been when trying to nail his own property deal.

In a difficult market getting good advice is still very important. Getting yourself a good lawyer really can make a difference. It can help you get a better deal if you discover something negative in the title of the property for example, it can unearth weird covenants (rules if you will) that could restrict what you do with the property, and if in a contract race having a proactive lawyer who will pick up the phone and get the deal done, will make sure you will get the property.

For more information on how choose a lawyer check out the following link.

http://www.obligo.co.uk/conveyancing.html

My recent blog interruption was the by product of a quick trip to Italy to see our technical director who is in the final stages of closing off some of the key functions for obligo.co.uk, that we will be rolling out shortly. The next few weeks will be the culmination of months and months of hard graft, planning, sweat and tears. I do hope you like what we are about to bring you!!

On my return to Obligo HQ here in Essex, I had a full day scheduled for interviewing some new talent to work on the MortgageExpert desk. The previous week I had called up a long standing pal of mine who runs an excellent recruitment business that specialises in financial services. John at Coast recruitment, usually comes up trumps and over the years I have hired many really good people who have been great to work with in the mortgage and property industry.

I had also put the positions on the website; you can see them by looking at:

http://www.obligo.co.uk/jobs.html

Now my predicament was this: do I look at people with the requisite qualifications who can advise on mortgages straightway, but will also probably have their own ideas on how things work? Or do I look for a rookie who possesses raw talent that we can train and hone into the incarnation of obligo?

Decisions, decisions.

In the end I decided to see half a dozen contenders from a pile of CVs. Some qualified, and some not. Now, when I interview I always expect to see a couple of non contenders and a couple who have the wrong attitude or disposition. On this occasion how wrong could I be?

From six interviewees there are now six serious contenders. I would hire them all if I could. The quality and attitude was just marvellous. All had prepared, and all asked the right questions in the right places. One guy just out of Uni virtually interviewed me! What an insight he had for one so young and inexperienced. I felt worn out after my grilling!!

Where am I going with this? My blog today is to highlight that whatever employers say and whatever we hear about education standards slipping, our young people (all applicant were under 30 on this occasion) posses talent, qualifications, and a “can do” attitude. I really can’t put a cigarette paper between this group and over the next few days I will have to decide what to do. Days like the one I had interviewing really give me heart, and help to fire me up even more. I really think that with talent like that around the place I will have to run to keep up.

It’s true that a business is only as good as its people, and with any of these applicants we will have the footings built of a really solid business built around both customers and staff.

The growth in credit availability over the last 15 years fuelled a boom in specialist lending from a new generation of mortgage lenders who lent to the self employed and to those with past or present credit problems. Since the implosion of the mortgage and banking industry many lenders have exited the market leaving borrowers high and dry, trapped in mortgages with high rates and with no alternatives from a mortgage market that now lends only to those with A1 credit ratings and a very low loan to value.

In Britain, mortgage poverty is usually associated with council estates and the working classes. However, as a consequence of the credit boom, then credit bust, the leafy suburbs of Great Britain are home to a new class of families weighed down by mortgage poverty, locked into expensive mortgages and with no means of reasonable escape.

The shame of it all is that these lenders offered flexibility of underwriting and inclusiveness and fairness by opening up the market to more people. Somehow along the way it lost its track and underwriting criteria became absurd and wreckless. For many people who are either self employed, have irregular income, or had a bit of adverse credit in the past, but are good payers, the outcome has been a disaster. The market has experienced a huge knee jerk reaction and now mortgage finance is available to just the chosen few.

Many of these consumers have mortgages with lenders who have stopped new lending, or in some cases have gone to wall. Most of these borrowers took deals on two or three year fixed rates and expected to remortgage to a new fixed rate or cheaper deal  as they been encouraged to do by the market, the regulator and consumer groups

If you are one of these people, you can try to renegotiate the rate or the terms with your current lender. Incredibly, some lenders are waiving penalty charges and in extreme cases even paying borrowers to go elsewhere. If direct action with your existing lender fails find a good broker and see what can be done.

Sadly, deals for consumers who are self employed, with a patchy credit history or unusual circumstances are scarce in the extreme, and there appears to little light at the end of the tunnel just yet. I guess we just to wait and see what happens next.

Yesterday was budget day, and at last it seems that the government are beginning to get a handle on some of the key elements stalling the property market.

The life blood of a healthy property market, ergo, a healthy economy, is the first time buyer. Feeding the bottom of the chain is vital to create inertia in the rest of chain.

Yesterday Alistair Darling took the brave step of abolishing stamp duty for first time buyers on purchases up to £250,000. This much needed shot in the arm, of up to £2500 per first time buyer, will go some way to stimulating and creating interest in the lower rungs of the market, which by all accounts seem to be very slack.

Whilst it is good to see positive action, there is still the problem of mortgages. It is true to say that for most lenders first time buyers are not an attractive proposition. Indeed, most lenders are pricing products for higher loan-to-value deals at such punitive rates when compared to bank of England base rate, that most first time buyers either just can’t afford them, or feel that they should wait until things ease up. The problem is there is no real sign of things easing up.

The reasons for this have been poured over many times, and quite frankly most consumers have just about had enough and are either confused, bored, or no longer believe they have any reasonable prospect of participating in the property market. So what is the problem? The crux of the problem is simply that there is no competition between lenders, and that just a few mortgage lenders effectively have the market cornered. Between them they can pretty much pick and choose from most credit worthy, with a flawless track record, and have no need to expose themselves to the first time buyer.

What is the solution? Sitting in the office of the Financial Services Authority (FSA), are 30 applications from banks and companies wishing to be authorised to lend mortgages. These applications have been blocked by the FSA for some time according to industry magazine “Mortgage Strategy” thus preventing new entrants from creating a more competitive environment for lenders, leading to better, cheaper mortgage for you and me.

Yesterday, Alistair Darling urged to FSA to clear this backlog, no doubt ruffling feathers at the FSA. I just hope that Darlings request is taken as a call to action for the greater good and is not morphed into a political football. Only time will tell.

In the coming months we hope to see new mortgage lenders, new mortgage products, and most importantly to experience lenders really wanting our mortgage business by competing for it. Once that environment is with us, you can expect to see more innovation and better deals for first time buyers. Once we have first time buyers back in the property market we will have the green shoots of recovery towards a functioning property market. That does not mean another boom (not just yet, but rest assured it will happen again!), just a decent market, with mobility and a healthy number of transactions.

Keep your finger and toes crossed.

Once more I have been reading the latest mortgage news. According to the Times, the City watchdog, the financial services authority (FSA) has met with opposition to its proposals to ban "100 per cent mortgages" and similar “riskier “ mortgage products.

In a statement on the feedback received to its recent Mortgage Market Review, a document that had been floated proposing draconian regulation on mortgage products, the Financial Services Authority (FSA) has acknowledged that there is little support for the introduction of a ban on higher loan-to-value mortgages or restrictions on the amount customers can borrow as a multiple of their income.

Previously even Prime Minister Gordon Brown had suggested that there should be a ban on 100 per cent mortgages which require no deposit. Seems Mr Brown is a personal finance advisor too?

There was also a "polarised" response to its proposals to ban controversial self-cert deals, The FSA had proposed that mortgage lenders should be required to check the income of all mortgage applicants, a plan which has been bizarrely supported by consumer groups even though as it would deprive consumers of choice and access to mortgage products.

It also reported it that larger banks have complained, arguing that it will unfairly penalise the self-employed, who are not able to provide proof of regular income from an employer and that customers previously granted a self cert type mortgage would now be trapped with a mortgage, probably on a high rate that they were unable to remortgage.

The banks have also insisted that low risk applications, such as those from existing customers, should not have to go through the process of verifying income which is costly to administer and would drive up the cost of mortgages with no tangible benefit as they argue that these types of borrowers have a much lower incidence of arrears.

What has become clear here is that a balance must be drawn. On the one hand the lending practices of the last few years need to be reined in and prevented from happening again. On the other hand in a modern Britain where we champion inclusiveness and fairness we must, in the words of David Cameron “make Britain the best place to set up a business”. How can we achieve this if the self employed are prevented from accessing credit?

The next few months will be a defining period in history of the UK mortgage market. We will have to wait and see if fairness and good judgment is over powered by political headline making.  It a subject that affects us all and we should all be concerned by the potential ramifications, as they could well affect everybody.

So here I am again, trawling the online press for news and views as I do, searching for little news nuggets that might have some value for obligo site users in their quest for quality mortgage, remortgage, and property news!

Today, it’s the turn of the Times. And today is back to that old chestnut – property prices!!

Yes, my least favourite, and most favourite subject that consumes column inches and virtual column inches on a daily basis enmass, which despite my intended whinge in this blog, is now about to be added to by me!

Today it seems the election is going to be the driver for a property recovery or property slump. And there’s more. Property prices may go up or down or possibly stay the same. Compelling journalism eh?

Property prices do interest me. I have a vested interest in them. I have a house in which my family and I reside. Why property prices interest me so much somewhat confounds me, but I think it must just be in my DNA, or maybe it’s just become pack instinct. I just don’t know. What I do know is that however wrong I know it is to obsess over property values, it’s exactly what I do. On a daily basis.

Maybe I should consider myself lucky. I could be obsessed with gambling, or drinking, or some other vice? But no, every morning I get online to see who is saying what about property values, agree or disagree, and then spark up an office debate about the British obsession with property prices, and how it is wrong, and that the people who obsess over them are damaging society and propagating greed and social breakdown.

Life is full of contradictions and we are all contradictory, often the things that annoy us, also fascinate us at the same time. There are few subjects that inflame and divide in the way that property prices do and its a sure fire thing that whatever happens , that will not change.

Prices go up and prices go down... Sometimes they even stay the same. Will the debate end? I think we all know the answer to that one!

Today, I was reading the Guardian news online as I do with all of the major online news providers in my quest for information and trends. To my surprise I came across article concerning comments made by Lord Turner, the chair of the financial services authority.

In it, Turner says that amongst other things caps on loan to value ratios should be introduced and that the supply of mortgage should be restricted (like they are being handed out like sweeties now lord Turner!). Also, worryingly, he says that banks should also have to hold more capital against certain types of loans made by banks.

What he means on that point is that banks should have to keep more money set aside on first time buyer loans for example. A practices that in itself will drive up the cost of first time buyer mortgages and the like.

So in one fowl swoop, Lord Turner wants to make 95% and 100% mortgages a thing of the past in an attempt to control the so-called boom and bust of the UK property market even though controlling the market is way out of the remit of the FSA, who are supposed to regulate and not meddle in the function of markets.

For 30 years 95% and 100% mortgages have been available and until now they have been working well. So what’s wrong with them now?

I believe the problem with mortgages in the last few years has not been what they are; it’s those who have been allowed to have them. In the hands of a responsible borrower there is nothing inherently wrong with 100% mortgages. If they can afford it, have a good credit record and can demonstrate financial stability surely they are worth lending to?

It’s a little like saying that we should ban cars because they kill. In the hands of a maniac a car is dangerous, but in the hands of the responsible they are extraordinarily useful. To stop cars killing people we don’t let the wreckless and irresponsible drive them (that’s the theory!) and the same should be applied to high LTV loans. If you cannot demonstrate the required level of stability, affordability and responsibility, then you can’t have one.

The same goes for self-certification and sub prime, and other specialist lending products that make the UK mortgage market innovative, excellent value, and inclusive.

Lord Turner and his fake austerity measures and post recession self-flagellation really are missing the point, which for me is very worrying coming from the man at the top. Its fine for Lord Turner, (yes, lord as in lording it up) to tell the rest of us what medicine he thinks we should take, but it appears that he, like so many others, are going for trendy sound bites and self administered austerity in an attempt to curry favour in certain quarters of the media.

The market does need tighter regulation in some areas, and it’s true that lending criteria was way too lax. Today, in early 2010 we have much more hands on supervision from the FSA, and many of the companies who caused so much of the chaos have good under or been closed down.

Today, mortgage availability is extremely limited and lending criteria now ultra tight. The market has regulated itself.

Lord Turner almost certainly did not need a 95% or 100% mortgage when he made his first purchase, but normal hardworking people do. If you are graduate and leave university with a chunk of government induced debt, saving for a deposit is just not that practical. It’s even less practical when you have to pay rent that could be used to service a mortgage.

What consumers and businesses need now are lenders that lend, and what lenders need is borrowers who borrow. Sure lessons must be learned, but we must react with hindsight and not in a knee jerk reaction when the facts are not yet really understood.

It is now just a few weeks until we open the virtual doors of obligo to the world as we begin a month or so of Beta testing.

What has become apparent in the last few months of development is that obligo is now so much more just mortgages and property.

The ethos of the business is now so focused on the user, and goes way beyond the transactional hum drum of arranging mortgages. Obligo is really going to be a place where users can explore mortgages and property in an engaging and useful way.

Many things on the obligo project have been so very different to previous start ups I have been involved in. We count our capital as site visitors, not revenues, and our growth by the number registered users per month/year, not our return on capital. It’s obvious. The old measurements of pounds shillings and pence will come if we succeed in engaging consumers for the long haul with an obligo that provides tools and solutions, not just here today transactions.

This time around there is no marketing firms, no advisors and no gloss. Obligo is the baby of engineers and mortgage experts, not marketing gurus. Everything you see adds value and helps consumers make the best use of their money by providing great functionality, useful information and greater transparency.

As for the business plan? Well, the plan is there is no plan in the traditional sense. There is no plan for financial growth, sure we want to cover our costs, but obligo is about redefining how mortgages and associated products are delivered cheaply and effectively to consumers post recession. Crack that and the money will look after itself. Consumers will decide our fate.

I keep thinking that we are going to take some criticism from the mortgage establishment because we dare to disturb and disrupt how things are done. But for us, that just how it should be? The mortgage market is broken and its only going to get fixed by innovation, risk taking, and questioning why we do things the way we do. And after a recession there is no better time to say “why do we do what we do? Isn’t there a better way?, what do consumers want?”

Every time I see a mate, or somebody comes to the office or to home I show them obligo. Every time I get the same amazed reaction. Everybody likes it. Or everybody is being polite. In the next few months we will find out just how honest people are and whether or not our assumptions about what consumers want is a work of madness or budding genius.

Of course I hope it’s the latter.

Welcome to our blog.

Here you will get the latest news and trends that are happening within the mortgage market.  Our authors are experts in the field of mortgages and loans and present the very best in informed, and unbiased information.