Mortgage Column

Mortgage heroes and villains

Thursday, 25 June 2009 Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.uk

The mortgage market is far from stable, but who is going the extra mile to help consumers and who is just confusing things?

This week the CML made positive revisions to its mortgage forecasts for 2009, reducing the number of homes it predicts will be repossessed and offering a more optimistic outlook for total lending.

However, it also warned that it is too soon to believe that the housing market is at “the start of a robust recovery”. It said that while the seeds are being sown for recovery, “the improvement is likely to be slow and drawn out.”

The mortgage market is wobbly at best, so this month we ask who is tipping the balance for the better and who could cause it to crash?

My mortgage hero

I am awarding the title of mortgage hero to HSBC (www.hsbc.co.uk), which is making a concerted effort to help borrowers through the mortgage squeeze.

First, HSBC launched its 90% loan-to-value mortgage for first-time buyers in April, offering a glimmer of hope to thousands of hopeful buyers that had otherwise been completely excluded from the market.

Then, earlier this month it reintroduced its Rate Matcher mortgage, which promises to match or beat your existing mortgage rate (as low as 2.49%) and allow you to fix it for up to five years.

With mortgage expert Ray Boulger urging homeowners to fix their mortgage without delay, many people are considering it and for those who want to fix but don’t want to pay a premium, the Rate Matcher offers a great solution. Although as with any deal, you need to weigh up the interest rate with the fees.

I’m not the only one to admire HSBC’s work. The bank was recently honoured at the at the annual Moneyfacts awards and was presented with an array of awards including “Best first-time buyer mortgage provider”, “Best remortgage provider” and “Best bank mortgage provider.”

HSBC is one of the few big banks that has not needed to seek help from the government and seems to be surviving the recession in rather good shape. Hopefully it will continue this way and be able to offer further attractive offers that inject new life into the mortgage market!

My mortgage villains

I’m reluctant to brand them villains, but I do feel quite strongly that the over zealous optimism of estate agents is rocking the housing boat.

What they are doing isn’t really villainous and I do understand their motives, but their unwarranted positivity when it comes to house prices is starting to jar.

Last week the National Association of Estate Agents (NEA) claimed there are now four house hunters for every property and NEA’s president Gary Smith chimed: “There are buyers a-plenty out there.”

However, their overall assumption was based on figures that said the average estate agency branch had 299 house hunters on its books and 69 properties for sale, but did not take into account at all the fact that while most sellers will only register with one estate agent, potential buyers are likely to register with several, maybe even half a dozen, estate agents.

The idea that in the current property market overall there are four house hunters for each property is over-optimistic to say the least.

Estate agents are fuelling headlines that remind us to read all news with a pinch of salt and look carefully at the motives of those who are preparing the “facts”.

And when it comes to calling the bottom of the housing market, well that is practically impossible even for mortgage experts, so it’s essential to exercise some serious caution when hearing the gleeful chants of positivity coming from these rosy-spectacled estate agents…