We're all going on a summer holiday...not!

The clock has just past midnight on 31st August. I have been back home from my last appointment for just over an hour and whilst I sip my tea, and listen to every "old romantics" favourite radio station reminiscing on the 80s, I ponder...WHAT THE HELL HAPPENED THIS MONTH?!?

August is seasonally a month of little activity in the mortgage industry. Families are mostly away spending ludicrous amounts of money on family holidays, piling on the pounds whilst eating yet another pizza as "I'll start the diet when I get back" becomes one of the most commonly used phrases.  Britain's ponder on how dark their skin can really get if exposed to enough sun, and really the prospect of buying a house or remortgaging is the last thing on everyones mind.

So what the hell happened this August?!

This month has proven to be the best month I have had since the credit crunch began. In fact, the best month since I peaked back in 2007. Additionally, the majority of the business was purchase related. It seems there is a confidence to buy again in the market place. Either that or more people have found my phone number!! The fact is, it wasn't just me. The majority of my broker friends have all enjoyed a very busy August. It seems the announcements of H1 results from lenders, exposing drops in market share and smaller profits year on year, got the lenders angry. They priced with an aggression not seen since Tyson stepped foot in the ring in the 90s. For those out there that were thinking "Is now a good time to buy?" the temptation of rates as sexy as 1.48% over base for two years were simply too good to ignore. Rates fixed over 5 years at 3.39% have made  people say "Deal" rather than "No Deal" as people face up to the fact that rates could potentially not really get much lower so it's a good time to lock in.

I predicted earlier this year that 5 year money would drop a lot lower than the 4s we were seeing. I actually predicted that we may even see rates as low as 3.50% over 5 years and I felt I was putting my neck on the line in saying so. So 3.39% was almost as much of a shock to me as anyone. But this aggression, this appetite has now extended to higher LTVs. Skipton's 90% tracker at 4.88% was so popular with clients that Skipton had to withdraw the product with immediate effect and no notice. They were swamped with applications, and not surprisingly so. Abbey stepped up their claim on 90% deals as did Northern Rock, and only today I completed an 85% deal on a fixed rate over 2 years at 3.95% with £500 cashback WHAT A DEAL (and yet again Northern Rock - I say well done).

The truth of the matter is, the market has gone just a little bit crazy. In a world where football players are getting paid over £350,000 a week, it seems lenders have realised that money is still in existence and that perhaps they were a little, erh...tight for want of a better word and have decided to get back to business. We're seeing improvements on score cards, and personally I am seeing a much more proactive approach from lenders, looking to see how they can help us again.

Its beautiful.

Seriously, it is!

I have been encouraged by many things this month. Obviously the activity, but also the lenders willingness to help. To aid, as best they can, to get these applications through to offer stage and to see us get over the finishing line. It seems lenders are back on board the "mortgage lending gravy train". So if there is a message to get across tonight at near on 1am, it is that a) i should be in bed and b) that lenders are on side again. They want to lend. They are helping us to push things through and not simply saying no. They are starting to see that not everyone in Britain has a 40% deposit and that lending at 85% or even 90% can be priced competitively and that there is a massive market for it.

Well done this month lenders.

Well done this month underwriters.

This month you have excelled. So keep up the efforts and we will all go into 2012 with strong pipelines, and clients will go into 2012 in homes so affordable that they don't have to wear 6 jumpers in winter to save on heating bills.

Horrah, for the mortgage industry!

Its raining, its pouring, the big banks aren't lending...

A very interesting week this week , as we see the banks post their profits for the first half year (you will see this cunningly referred to as "H1" - about as cunning as a fox, from the village of cunning!).  This is a big announcement. It gives us all an indication of how the banks are performing, if they are on target and how it compared to last year. For me, one of the most annoying statements of the mortgage industry is "how did it compare to last year?" This is never a straight comparison. There are so many variables that contribute to the outcome of lending year on year that I find nothing but frustration in these comparisons! However, that said, I can understand why they are reported.

And so it begins. Santander down 21% on gross lending from last year. Market share fallen from 19.1% to 15.4%. Great! Thanks for those stats. But could we look at the bigger picture here please. Why is it down? Barclays down 10% year on year on their gross lending, market share down from 14% to 12%. Oh dear god what is happening?! Northern Rock, down 25% on last years levels of lending over the same period. Don't PANIC! There is a simple answer here. The market was taken over by HSBC. They really went for it and were top of the best buys for a considerable period of time and it had the effect they desired... a big effect!

HSBC have always been the bane of us brokers lives. Why? Because they don't like dealing with brokers! Every now and again a broker will strike up a relationship with them and may get a few cases from them or send some to them but, in large, there is no official relationship between HSBC and the intermediary. Often this means, if HSBC want to take the market by storm it is without the help of us brokers. So when they decided they wanted to bulldoze the market, their headline rates stole the show. They went into 2011 with a good pipeline of business that was the result of outstanding rates, good advertising campaigns and an aggression no other lender was showing. This has seen HSBC publish results that show they are 35% up on their H1 results in 2011 compared to that of 2010. 35% UP! Their market share up 2% from 9% to 11%. Well done HSBC. A fantastic effort. This also, is the truth behind why brokers struggled in terms of written business tail end of 2010 and early part of 2011. HSBC were simply too damn good.

However, lenders are now fully aware they are under target. These stats don't lie, although as I mentioned at the outset, there are many other variables to consider. But we are already seeing lenders lower their margins. We're seeing rates some of us brokers have never seen before and more importantly for us, we're seeing HSBC no longer at the top of the best buys.

It is this aggression from the lenders, and THEIR panic that is of benefit to the consumer. The price wars that have started and the need to sustain a healthy pipeline going into 2012 has quite frankly seen stupid rates come about! 5 year fixeds from as low as 3.39% is lower than anything I have ever seen. Even better than that is the 2 year tracker followed by a 3 year FIXED  at 3.64%! What a deal! Abbey have come along with some very tempting "1 week only" offerings also that have seen service levels creek they have been so inundated with applications.

I guess what I am trying to say in my secret diary is that whilst all these headlines of lending dropping with some of the big boys is a little depressing, the reality is, this is only going to be of benefit to you , the consumer. The pressure to lend will intensify with the lenders. Will Santander or Barclays be happy they have lost market share to HSBC?! Of course not. This will drive them to lower margins, to become more competitive and further more to ensure they are not in the same position next year and that H1 results of 2012 will be higher due to a better pipeline.

So don't get too depressed about the gross lending being low, ladies and gents. Don't spit out your Earl Grey in shock when you read of falling lending in H1, as my prediction will be that H2 will show increases...left, right and centre! Not just with HSBC. That said, I may still take my local HSBC branch manager out for that round of golf...you never know when they may be needed.

"Hi, is Louis there please?"

"Louis...buddy, long time no speak . So that round of golf we were talking about...?"