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Is the positive news too good to be true?

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According to a report in Mortgage Strategy on 28 August, there are now over 10,000 mortgage products available to the man in the street and the Council of Mortgage Lenders’ prediction for Gross lending in 2013 remains at £156bn – up from £144bn in in 2012. 

With the market barrelling along at quite a pace, a Bank of England steer for long term low interest rates and our lender partners sharing plans for significant immediate uplifts in advance numbers, it would be no surprise is this figure is surpassed.  

The current CML prediction for a reduction in 2014 to £150bn also now looks open to challenge, given the momentum in the market. 

Don’t forget that the most ambitious of Government schemes to reinvigorate the market, Help to Buy 2, has yet to launch.

But unless the Government do a U-turn, from January, virtually everyone can take advantage of this scheme to purchase. 

Two factors may dampen my speculated boom.  

I recall with some embarrassment my internal advice that we should plan for a small blip in volumes caused by the new lender regulatory burden of Mortgage Day in 2004. 

In reality, volumes crashed and took months to recover across the market. Could we see a similar effect with Mortgage Market Review in April 2014, with lenders first cramming work in then slowing activity post MMR- or indeed having to do so due to a rise in non-compliant apps? 

Secondly, with the Help to Buy scheme apparently so attractive, might prospective purchasers in the fourth quarter of 2013 be tempted to delay their transaction to the first quarter of 2014, creating a dip in volumes at the end of this year?  

The answer is inevitably a summary of best  guesses – but then that’s the fun of budgeting! 

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