So here we are at the dawn of another bright new year, full of hope, optimism and expectation of another good year.
After the tumultuous changes in the market we saw last year with the implementation of the Mortgage Market Review, (MMR), we have already seen some extraordinary rates to kick start the New Year and with competition likely to be fierce to attract new customers, who knows where this will go.
With some 5 year fixes now below 2.5% and even a 10 year fix below 3% this really is extraordinary!
Talking to lenders, it seems that many of them have some pretty stiff targets to hit this year and competitive pressure will be enhanced by some new lenders coming into the market. Exacerbated by low SWAP rates and expectations of rate rises being pushed further out due to low inflation figures we are likely to see a continuation of the low products already on offer.
The issue of course, is that low rates will only go so far in attracting new business and until lenders start to look at easing some of the overly restrictive criteria that has come into play since MMR they will struggle to bring in the levels of business they require. Mortgage prisoners and transitional rules still need to be looked at, as well as improvements to self-employed and contractors, older borrowers and the whole interest only debate.
This does not mean lenders should become lax overnight but they need to return to a sensible middle ground that does not discriminate against such borrowers and cause consumer detriment. With the FCA conducting a review of lenders policies in the first half of the year, the results of this could determine how much lenders feel confident to open up once more.
Nevertheless, we will no doubt see some interesting criteria moves, possibly more lenders coming back into areas such as interest only and a smattering of new lenders.
Base Rate is unlikely to move until the last quarter if at all, whilst we could see gross mortgage lending up to the £215 billion level.
The big unknown in 2015 is of course the General Election and the uncertainty around this traditionally leads to a slowdown immediately before and potentially a rebound after. With confusion around policies such as the Mansion Tax, especially after the stamp duty changes, holding back the prime London market there are a lot of questions to be answered. A long, drawn out process to establish a coalition government could lead to further disruption.
Meanwhile we have seen the extraordinary fall in the price of oil for a whole variety of reasons, whilst the whole EU crises is back on the agenda as the spectre of deflation rears its head. Some tough decisions beckon for EU leaders as the whole single currency concept clings on by a thread.
Of course we also have the unknowns! What is possibly lurking in the shadows to surprise us this year both for better or for worse?
All in all though, we are very optimistic about 2015. For the consumer in the mortgage market there is more choice across all Loan To Value levels with lenders keen to lend. Yes, there is more documentation to provide, but all in all the MMR has bedded in nicely and it is time to move forward.
Given the rates that are currently on offer, with the promise of more to come, those looking to buy or remortgage seem to be doing so at the right time.