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Adapt to survive the market turndown

As the character Tancredi Falconeri comments in the film adaptation of the classic novel The Leopard, If we want things to stay as they are, things will have to change.

Change is a fact of life, in good times and bad. Its how you cope with it that matters. With the news last week that the UK housing market is finally beginning to turn, how will the mortgage industry adapt?

The housing market has endured everything from mortgage regulation in 2004 to the recent downturn in the US sub-prime market, but three successive rate rises have begun to take their toll.

A number of housing indexes last week demonstrated that demand for property is starting to slide. The latest data from the Bank of England shows total mortgage approvals have fallen for two months running and were 0.7% below 2006s levels.

This was backed up by figures from the British Bankers Association, which indicated that mortgage demand is moderating in the face of rising interest rates. While gross mortgage lending of 17.3bn for April was 12% above the same period in 2006, the actual number of mortgages approved 170,000 constituted a mere 1% increase.

May was gloomy as well. Nationwide revealed that the market continued to slow last month with house prices increasing by 0.5%, down from 0.9% in April. Which brings us to the big question of whether the BoE will decide this week that further rate rises are needed. Our Shadow MPC on pages 48 and 49 predicts a hold fingers crossed its right.

Elsewhere, we saw Kensington Group courted by South African investment firm Investec, which is offering shareholders 519.5p per share. The lenders management is in favour of the acquisition as Investec would beef up its capital resources.

If the market continues its downward trend, it will be interesting to see how many other firms cosy up to international investment in the coming months to maintain their competitive edge.


MP calls for better bank checks

Labour MP Jim Cousins, who sits on the Treasury select committee, has called for banks to introduce a code of practice and carry out regular checks to ensure there are no errors in customer repayments.

Nemo launches loyalty scheme

Nemo Personal Finance is launching a loyalty scheme called Quarterback, which gives its secured loan customers a quarter of their interest back after 10 years. Nemos latest offering will typically be taken out by customers wanting to consolidate their debts or make home improvements. It works by giving customers who take out a secured loan […] moves closer to float

The prospects of price comparison site moved a step closer this week after co-founder Duncan Cameron was bought out for 162 million. Cameron agreed to sell most of his 47% stake to a company controlled by chief executive and fellow founder Simon Nixon.The website is thought to want a listing on the London […]

Identifying best-in-class UK stocks — Mark Martin, Neptune UK Opportunities Fund

FE Alpha Manager Mark Martin assumed management of the multi-cap UK Opportunities Fund at the beginning of February. As manager of the highly regarded UK Mid Cap Fund, Martin has begun restructuring the new portfolio to focus on our very best UK stock ideas from across the FTSE All-Share Index. In this video, update Martin addresses:

– Themes informing the UK Opportunities Fund
– The multi-cap structure of the fund
– UK equity valuations


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