The Data Vault

Rick Watkin, chief executive at MCI Club and MortgageKeeper, crunches the numbers to bring you the key market trends


Ever wondered why so few people predicted the credit crunch? Of course, there was Vince Cable (who spent the next five years or so making sure everybody knew he had foreseen it) and a handful of others but, for the most part, there were very few predictions. 

That is because industry experts notoriously hate making any sort of market forecast. It is a difficult thing to live down if such surmising proves wrong. 

In this case, of course, it could have done because few could have imagined that such a downturn would occur. But in general you would be hard pushed to find many industry figures willingly offering their predictions.

And it is not hard to see why. The handful of so-called industry experts that do make market predictions use old-fashioned formulae to determine trends. Such methods are, more often than not, wrong. Recent speculation on a rise in interest rates is a case in point.

For a good few weeks the newspapers were awash with predictions of epic rate rises that would leave homeowners at risk of soaring repayments and would generally cause chaos. Those predictions were based on a number of factors. Wage increases, including a rise in minimum wage (announced in George Osborne’s summer Budget), and concerns that inflation might breach its target will have played a part.

The fact that the US intends to increase its rates will also have had an impact on the predictions. As we know, where the US leads, we follow. And so speculation was rife.

Of course, just as the Bank of England came out and said as much, China devalued its currency and all rate rises were off. Governor of the BoE Mark Carney has since said that, while the market crash and events in China may affect inflation, he does not expect them to delay any planned interest rate rise. But how can this be possible?

Indeed, predictions in general are so often wrong it makes one wonder why anyone would persist in making them. Along with leaving a lot of people feeling slightly sheepish, this one in particular has caused unnecessary panic in the UK mortgage market. Perhaps it is time for the experts who want to venture an opinion to do so by finding more accurate methods. 

Now, on to this month’s data. While one is reluctant to make predictions, the figures allow us to identify trends and patterns.

First, congratulations to NatWest, which has, for the first time, taken the top spot from the Halifax and Nationwide in the past 30 days. 

With volumes continuing to rise, more competition will also be welcome as long as the service levels are maintained. Fixed rates, as always, continue to dominate.