Regrettably, Mortgage Strategy saw it coming but like Cassandra we were unable to do anything about it. Will things improve in 2009? With the wider economy on track to enter a prolonged recession, don’t bet on it.
The government has thrown hundreds of billions of pounds at the problem but there has been no major upswing thus far. Prime Minister Gordon Brown may have staved off total disaster in September but lenders are still keeping their powder dry while borrowers and businesses struggle. Forget saving the world, Brown is struggling with just one island.
The next year will be characterised by rising arrears and repossessions and we still await the full details of the government’s Homeowner Mortgage Support Scheme. Ditto whether it will deliver on Sir James Crosby’s recommendation to guarantee mortgage-backed securities.
Some in the industry predict that broker numbers will have to fall by 40% for the remaining 60% to survive. But 70% of borrowers still use brokers and that situation will continue because consumers want impartial advice.
So 2009 is going to be tough but in the UK property demand will always exceed supply. This means that once funding constraints ease the market will return and the sun will shine once more.
Don’t forget that over the festive season you can keep up with the news by logging on to www.mortgagestrategy.co.uk. For now, Merry Christmas and we’ll be back with our first issue of the new year on January 12.