After 14 happy months in the Mortgage Strategy stable, I’m off to edit my own magazine.
I’ll still be writing about mortgages but shifting my focus from brokers to estate agents, who are having an equally tough time riding out the current market turmoil.
I’m excited about the challenge but this feeling has been somewhat tempered by the economic outlook here in Europe and across the Atlantic.
The US is on the verge of recession, with its housing and stock markets having weakened significantly over recent months. And the economic outlook for the UK is bleak too.
Chancellor Alistair Darling revealed in the Budget last week that he expects the UK’s growth in 2008 to slow to between 1.75% and 2.25%, down from the pre-Budget report’s figure of between 2% and 2.25%.
He also announced that he will increase his funding requirements for the UK economy by £6bn as he expects to spend a massive £43bn over the next financial year, with £2bn more being ploughed into the armed forces.
The need to increase spending is perhaps no surprise given the global slowdown, which is expected to further affect UK exports. And since the US is the UK’s largest export market, it may be some time before this income stream picks up again.
Consumer confidence has imploded under the strain of the continued negative news flow and the knock-on effect on the housing market is evident, with house purchase loans at record lows and prices falling.
It’s interesting to read issues of Mortgage Strategy from 2002 when I started writing about mortgages. Back then the Bank of England base rate was 4% and Bristol & West was having to defend its 110% LTV deal in the face of critics who accused it of straddling first-time buyers with too much debt.
How times have changed. Last month saw the withdrawal of supersize 100%-plus LTV deals from the market with Mortgage Express following suit just last week. The base rate now stands at 5.25%.
I’m glad I got onto the property ladder in 2006, when rates, product criteria and property supply were more favourable for buyers.
Let’s hope this good fortune continues in my new job and that estate agents prove as resilient and professional as their broker peers have shown themselves to be, for the most part anyway.