View more on these topics

Marketwatch: What’s in store for 2016?

As George Osborne’s mood deteriorates from ‘Tigger’ to ‘Eeyore’, what should we be bracing ourselves for in 2016?

Happy New Year to one and all. Another year full of shiny hope-filled promise and speculation has begun.

Predictions for the year are, of course, ten-a-penny in January, with everyone pretending to be a sage or an economist. The ‘experts’ usually turn out to be hopelessly wide of the mark but there is nothing wrong with having some kind of opinion.

At the close of last year we saw a bit of positivity, with Chancellor George Osborne being pretty upbeat in his Autumn Statement, the US finally achieving lift-off with interest rates and speculation that the UK may follow suit. Fast-forward a few weeks and, to quote Larry Elliot in The Guardian, “It’s goodbye Tigger, hello Eeyore”, as Osborne seems to know something we do not.

Blame game

Now I am not one to get negative, especially at the start of a year (and for brokers it will be another good one), but could Osborne be using this time for – gasp – political messaging as he blames a “dangerous cocktail” of threats from elsewhere for not delivering on some of his promises?

Yes, there are issues in China – some pretty big ones. Emerging economies such as the BRICs are struggling, commodities ain’t all rosy and oil has been flatlining, not to mention the fog of confusion that is bound to cause issues around the threat of a Brexit, but there is still much for us to feel OK about within the UK economy.

In fact, the Chancellor posed a bit of a contradiction when he said we need to get ready for potential interest rate rises. Surely if things are looking grim, can’t we think about raising rates? With inflation still on holiday, wage growth will be a key measure for the Bank of England.

House price rises are still the order of the day, with Halifax reporting that December showed a 1.7 per cent rise – which is 9.5 per cent up on a year earlier – although they do see the trend softening slightly.

As for the Government’s building plans, there is so much to do that it is almost unfathomable and there remains the question of whether the builders have the capacity, labour and materials to even get close to the targets we need.

According to a poll of 88 economists in the Financial Times, none thought the Government’s latest housing initiatives will make any real difference. Even the additional stamp duty changes on second properties or the buy-to-let tax changes will only “scratch the surface”, they said.

As I have said before, the Government needs to be careful not to go suddenly over the top on even more anti-buy-to-let legislation that could worsen the issues it is trying to avoid.

Mystic Monty

As for my forecast? I anticipate overall house prices up 4-5 per cent, driven mainly by a continued lack of supply and higher demand; the FTSE ending the year around the 6,700 mark; gross mortgage lending around the £230bn level; and, as for Bank Base, well let’s just say it will be either 0.5 per cent or 0.75 per cent. All of this, of course, is governed by the Ceterus Paribas rule and subject to change on a whim.

In the markets this week, three-month Libor is at 0.59 per cent, while swap rates have fallen out like the Labour front benches.

2-year money is down 0.03% at 0.97%

3-year money is down 0.03% at 1.14%

5-year money is down 0.03% at 1.42%

10-year money is down 0.07% at 1.82%

As for our market, more in detail next week, but it is a case of more of the same from last year, with the first quarter shaping up to be especially busy for all of us. Lenders still need brokers and our share of the market will remain the lions share, even growing further.

What I will say is that as we embark on a busy year, remember the resolutions inevitably made to ourselves and our loved ones. So let’s work hard, put in the hours where needed, enjoy the networking, but try not to be so overconsumed that we forget what or who we are working for.

Look after yourselves and enjoy – after all, that is “mission critical”.

Heroes

Recommended

Equity-release-house-home-700.jpg

65% of equity release advisers expect increased consumer interest

Nearly two-thirds of retirement specialist advisers predict a rise in equity release interest over the next 24 months, according to research from Key Partnerships. Some 65 per cent of the 105 advisers advisers believe this, while 44 per cent see “considerable” future opportunities as a result of the Chancellor’s pensions freedoms. A major growth area will […]

Andrew Montlake-Coreco

Market Watch: A good BDM should be treasured

A BDM is for life… so take the time this Christmas to thank yours and let them know you couldn’t manage without them I thought I would use this special 200th edition of my column, which handily appears just before Christmas, to pay tribute to a group of people in the industry who have worked […]

Home-House-Monopoly-Money-Property-700x450.jpg
10

‘Banned’ self-cert loans set for return

A new lender is looking to bring back self-certified mortgages at the start of next year. The FCA banned so-called ‘liar loans’ in the Mortgage Market Review. However, Graeme Wingate, the founder of unsecured lender Quick Loans, is looking to bypass UK regulation by setting up in an Eastern European country, the identity of which […]

Restricted_lending_megadrop.jpg
2

Age limits

The credit crunch has put paid to the plentiful supply of lending into retirement products and now older people are facing a rapidly shrinking market as providers cut the maximum age on their standard mortgage ranges 

Pension - thumbnail

David Cameron appoints former adviser to Tony Blair as new pensions minister

Following a cabinet reshuffle in light of last week’s general election, David Cameron has announced that Ros Altmann will be replacing Steve Webb as pensions minister. As the industry works with one of the largest reforms to the sector in almost a century, the former adviser to Tony Blair has been tasked with ensuring that the pensions revolution does not stray off track.