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2012: What does the future hold for the mortgage market?


In my mind 2012 was always meant to be the year when everything began to improve, after all we have the Olympics and the feel good factor from that together with a good Euro Championships would surely propel us on to bigger and better things? However, it looks as if I may have been a little lost in dreamland with that, although to be honest no-one really foresaw the issues from Credit Crunch 1 mutate into the mega-storm that threatens to break up the Euro itself.

The only thing we can do therefore is to put the Euro issues to one side and assume that things will remain much the way they are. In fact, if anything things are a little clearer now, especially as we have finally seen the much anticipated Mortgage Market Review and know that there is nothing really to fear there.

So whilst I agree that lending will be pretty similar to 2011 I think there are reasons to be optimistic, rather than continue to get weighed down by a dark cloud of disillusion. Whilst the doom mongers are still predicting the end of the world, especially where house prices and lending is concerned I disagree.

Mortgage costs will continue to rise slightly, whether or not the Euro issues are sorted, but for different reasons and whilst we may well slip back into a technical recession things do actually feel different to the first credit crunch. For one, lenders are still talking about lending, they still have plans to bring more products to the market and there is every sign that competition will increase, however slight it is.

Remortgage business will begin to return as borrowers get ever closer to increasing mortgage rates and a there is a massive amount of people coming off products and moving onto higher variable rates. Now that broker levels have dropped by a third, that is an awful lot of orphan clients to target. Buy To Let will continue to grow in strength.

Some lenders of course will try and fail yet again to up the amounts of business through their branch networks, especially now the FSA has rightly recognised that advice should be a cornerstone of any mortgage proposal.

In fact, Euro aside again, what is really worrying some in the City is actually the potential speed of an upturn. If the Euro does not go Kaput , if there is a feel good factor, if job losses are not as severe as thought and if the costs of QE do lead to higher inflation for longer and the global slowdown begins to turn toward the end of the year, what then?

I know that is a lot of ifs, but someone needs to think about these things. For those hard working brokers who have survived this long, the exceptionally dim light at the end of an extraordinarily long tunnel, could prove to be the brightest light for many a year.

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