In their prime mortgage market briefing for May 2010 Knight Frank have reported as follows:
– the number of £500k+ mortgage completions rose by 162% in May compared to May 2009. This dramatic rise reflects the relatively depressed conditions present in the market in the first half of last year.
– recent trends confirm that growth in the market is continuing, with a 26% rise in £500k+ completions in the three months to May.
– The volume of applications for £500k+ mortgages rose in May by 87% on a year-on-year basis, over the last three months the volume of applications recorded growth of 23%.
– The election certainly impacted on the volume of activity at the early part of the mortgage process, with the number of mortgage offers declining by around 39% in May compared to three months earlier.
Simon Gammon, head of Knight Frank Finance
comments: "While the £500k+ mortgage market is undoubtedly much healthier than it was a year ago, there is growing evidence that lenders are being more discerning in terms of which applicants they will make offers to.
"After a long period of steady decline the average LTV for £500k+ mortgages rose in May for the second month in a row to hit 68%, up from 53% in March, lenders are widening their spread of products on the market, despite this uplift in average LTV the market at this level is still being driven by equity rich purchasers.
“Average rates on newly agreed mortgages have moved up slightly over the past month, from 3.27% to 3.40%, but are still lower than average rates last May (3.96%). The rise in average rates is related to the trend towards higher LTV products.
“Borrowers are increasingly looking at fixed rate deals (61% of the total in May) with concerns from many to secure deals before rates rise.
“Activity at the £500k+, and especially at the £1m+, level of the market, is increasingly being driven by new entrants into the market. Middle East and Asian banks are now increasingly active in the UK market and are targeting this end of the market.
“Private banks are again back in force and are widening their range of products at the 80% and 85% level — with significant improvements in the level at which they are prepared to lend at.
“The range of borrowers we are seeing is increasing with a growing number of Russian, European, US and Asian borrowers — in the market.”
Today’s Conveyancer wonders quite how many firms have been able to create specific services tailored specifically at helping foreigners acquire in the UK.