Product and people news, as well as announcements of deals have come thick and fast today in the property and mortgages arenas.
Standard Life says its Select Property Fund was the fastest growing mutual fund in the first 11 months of 2006, taking total assets under management through the £1bn barrier in the 15 months since it lauched.
The provider says the retail accumulation unit price is up more than 44% in that time, something put down to global exposure and strong commercial property performances in both the US and Europe.
Meanwhile, in the mortgage space, GMAC-RFC has announced lending exceeding £12bn last year, up 75% on 2005. That growth compares with an overall market estimated to have increased in size by some 15%.
GMAC-RFC also claims to have taken market share from competitors “for the seventh year running”.
The lender also points out it expects things to continue in much the same vein this year, particularly as its online point-of-sale immediate decision offer continues to take off.
In similar fashion, Rooftop Mortgages has announced the launch of a new business unit to service completed loans, with Jonathan Naylor in charge as executive director.
The service will handle arrears collections, loss mitigation, litigation and property sales. Putting in place such servicing is seen as a natural follow-up to the lender’s growing book of loans.
Rooftop is a non-standard mortgages lender, which operates exclusively through intermediaries. It also works with packagers such as Beacon Mortgages and Mortgagematch Home Loans.
Axa Investment Managers strategist Aurore Wannesson-Raynaud points to a potentially weak area of property, namely the US residential housing market.
Having gone into free-fall last year, US house prices are predicted to continue decelerating at least through the first half of this year before stabilising as supply and demand factors align more closely.
The main question is whether a so-called soft landing will really be the case, or whether weakness in other parts of the US economy will cause the housing market downturn to continue.
Wannesson-Raynaud points out calling the market as a whole is tricky because of local issues, such as excessive weakness in the US Northwest – Chicago and Detroit – caused by ongoing changes in US automobile manufacturing patterns, or speculation-driven activities – Las Vegas – or the need to cater to retirement demands – Florida.
The UK link is of course US monetary policy, and just how the Federal Reserve might respond to any further weakening of consumption sparked by a collapse in the levels of mortgage equity withdrawal (MEW).
Such activity peaked in the second quarter of 2005, according to AXA IM figures suggesting consumers tapped into more than $1trn of MEW, or 9.5% of US GDP. With the dollar already close to record weakness against both sterling and the euro, any further cuts to US Fed rates could result in further challenges for eurozone and UK exporters, while not necessarily resulting in any major kick-start to the US economy.
Although Wannesson-Raynaud does not say it, this might be good news for UK buyers looking to acquire property in the US as prices in pounds would drop further still.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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