The latest Quarterly Economic Bulletin published by the Association of Mortgage intermediaries has seen caution thrown to the wind for the mortgage broker, as the economy slowly continues to improve.
The survey which looks at the economy, housing and mortgage markets has shown positive signs for the UK mortgage market, although it appears that tough times will continue.
In slightly worrying news, it appears that the latest report will see gross mortgage lending for the year fall slightly below the Council of Mortgage Lender’s annual target of £140 billion, with banks and building societies throughout the UK continuing to appear reluctant to lend to a number of individuals. With house prices continuing to fall throughout most of the UK with the exception of London and with renting more expensive than purchasing property in eight out of ten of Britain’s most populated cities, the property and mortgage markets continue to stagnate.
With it clearly cheaper to purchase rather than rent in most parts of the UK, the squeeze on household incomes is leading to a depressing demand. With the crisis starting to emerge within the Euro Zone countries and a real fear that the economy will contract once more, the c and mortgage industry need to be particularly cautious when tackling the future.
The director of the Association of Mortgage Intermediaries – Robert Sinclair – has claimed: “With interest rate rises off the agenda for some time, borrowers have little to fear in the short term from rising mortgage costs. Each quarter, we push back later and later our expectations for rate rises. Swap rates suggest February 2012 is when the Bank will increase them, but we think it could be even later than that now.
Sinclair continues: “Figures from the Bank of England’s Financial Stability Review also show there are still significant risks on bank balance sheets, with some demonstrating substantial exposure to high and very high LTV secured debt.” The latest report does bring encouragement for the mortgage broker, but the threat of further troubling times for the industry and the current economic crisis within the Euro Zone is leaving an air of negativity throughout the market. Suitable and affordable mortgage deals still remain for the right client, as long as the right mortgage advice is undertaken.