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Broker reckons longer term mortgage deals are best option at present

Simon Collins, product technical manager at John Charcol, said that despite doom and gloom in the economy purchase business for both residential and buy to let property is holding up surprisingly well.
John Charcol’s November figures reveal that residential purchases were up slightly on October at 57% of business submitted. The figure was also up over 10% on the same month last year. ‘This suggests that despite much of the reported negativity in the housing market there are still deals to be done,’ said Collins.

Buy to let purchase business was also significantly up on last year. ‘Savvy landlords realise that there are some very good investment opportunities to be had out there. Landlords also appear to be gearing up ready for an assault in the New Year to snap up some winter bargains while overall market sentiment remains low,’ explained Collins.

He believes that it has been helped by product innovation this year with Accord’s ‘Golden Handshake’ hybrid products leading the way.  Even some less well known lenders have got in on the act, with Saffron’s Rent To Buy and Newbury’s Family Offset products both available at 95% Loan to Value.

‘As well as this, an increasing number of lenders have returned to 90% loan to value, and there are many of the building societies that offer a more sensible underwriting alternative for those borrowers where the high street computer says no. All in all, there are very few cases that we are finding we are unable to place, you just need to know where to look,’ he said.

In terms of products taken by John Charcol clients in November, longer term mortgages that don’t require remortgaging every two years remained extremely popular. Term trackers, in light of predictions for the bank rate increase being put back to the early part of 2014, and continuing concerns over the availability of future credit, are particularly popular.

‘It is our belief that these offer better value than the vast majority of two year deals, that switch onto a managed standard variable rate at the end,’ added Collins.

The John Charcol Mortgage Index is published monthly and is regarded as a leading indicator of trends being based on mortgage applications submitted to lenders, whereas figures reported by the Council of Mortgage Lenders (CML) and the Bank of England (BofE) are based on completions, which typically take place two to three months after the mortgage application is submitted.