Purchase activity still on the rise

Conveyancing Alliance Ltd, the online conveyancing distributor, has today revealed a strong quarterly and year-on-year increase in both purchase instructions and completions, while

Related topics:  Mortgages
Millie Dyson
25th August 2010
Mortgages
Figures for Q2 2010 show a significant 33% increase in purchase instructions up from Q1 this year, which translates into a 53% year-on-year increase from Q2 2009. Purchase completions for the second quarter of 2010 are 21% up on the previous three months, delivering a 47% increase on the same period a year ago.

Remortgage activity in quarter two for both instructions and completions has remained broadly the same continuing at the low level it has been at for the past 18 months.

Conveyancing Alliance does however expect remortgage activity to rise as more borrowers find themselves on increasingly uncompetitive standard variable rates (SVRs); it believes those borrowers will look for better rates and products particularly given that many lenders are raising SVRs without a corresponding increase in Bank Base Rate (BBR).

It also anticipates a significant increase in remortgaging as and when the Monetary Policy Committee raises BBR.

In order to provide brokers with competitive conveyancing products for both remortgage and purchase business, Conveyancing Alliance recently launched its ‘Rapid Remortgage’ offering priced at £120 plus VAT; it also announced up to a 25% reduction in the cost of purchase conveyancing fees which now start at £229 plus VAT whereas the previous cheapest fee was £310 plus VAT.

Harpal Singh, Managing Director of Conveyancing Alliance Ltd, commented:

“We are particularly pleased to see both our purchase instruction and completion figures continuing to rise throughout last year and into 2010.  The year-on-year increases are notable and show the significant uplift in purchase business that has occurred in the last twelve months.

"At the end of quarter one this year we had noticed a slight increase in remortgage instructions and anticipated that this may well translate into an increase in quarter two.  It is disappointing to see that this hasn’t been the case and it still seems that many borrowers are still happy to sit on their current SVR deal, particularly if their lender is unable to increase their rate by more than 2% over BBR.

"However, there are an increasing number of borrowers who now find themselves on SVRs 4/5% above BBR and this is clearly where advisers should be urging at the very least a reconsideration of remortgaging.

“It is still our belief that remortgaging activity will rise from this low base over the next six to twelve months, particularly if BBR is increased during that period.  This is why we have launched the ‘Rapid Remortgage’ product which tackles the ‘free legal’ mentality that offers the clients no discernable legal service at all.

"Now with the low cost of this product, brokers are able to take cashback offers and use our remortgage service in order to deliver real legal value to their clients, while at the same time picking up an additional income stream.

"We will continue to support brokers with both their purchase and remortgage conveyancing work and if any firm is looking for information and help in order to generate increased revenue from this area, they are welcome to contact Conveyancing Alliance at any time.”
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