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MS Leader: Plenty to be positive about

Welcome back to the first issue of Mortgage Strategy of 2012 – was the Christmas holiday a well-deserved rest or were you busier than usual? We ask because some anecdotal evidence from lenders and brokers has been that business was pretty brisk rather than the usual seasonal slowdown.

So is this a sign of better things to come? Not if you read many of the economic predictions for 2012.

But as our new Marketwatch columnist Andrew Montlake says in his inaugural article this week, there’s no point writing off this year before it’s even begun. Sure, things look bad – gross lending looks set to be flat at best this year and with all the problems in Europe and potential collapse of the eurozone, people are talking of a recession this year as a best-case scenario. Nonetheless, people need mortgages and the desire to purchase properties is still there. Hopefully we will see further innovation over the coming year from lenders.

The inability of many consumers to get a mortgage continues to fuel demand for rental properties and lenders are clearly keen to satisfy this demand. Aldermore’s decision today to boost the maximum LTV on its buy-to-let range is encouraging and no doubt this market will become even more competitive this year.

Another encouraging sign has been the Financial Ombudsman Service’s proposal to boost the number of free claims firms are allowed from three to 25 in 2013. Its aim is to ensure that in future only 1% of businesses pay case fees. Many brokers have been hit by spurious payment protection insurance claims but it has still resulted in them being charged by FOS.

Anything that can help alleviate this death from a thousand cuts is welcome.


Value is best defence against pricing fears

There are fears that the European Court of Justice ruling against gender inequality reflected in insurance premiums could push up the price of protection products throughout 2012/13.

The Blindfolded Masochist

Two heads are supposedly better than one – but they can also be more destructive, as Michael Baxter argues in The Blindfolded Masochist.
The book’s tagline – “Creation versus destruction, the power of economic networks” – is somewhat misleading.

IMLA members expect hard conditions in 2012

The Intermediary Mortgage Lenders Association is expecting gross mortgage lending of no more than £130bn in 2012, some £3bn lower than the Council of Mortgage Lenders’ prediction. In December 2011 the CML downgraded its forecast for 2012 from £150bn to £133bn. Lenders have yet to reveal their figures for 2011, but gross lending is expected […]


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