Entering the new year on a positive note
ASSET MANAGER MARKET VIEW: By Peter Gammon, asset management director at Move with Us
Before we look ahead to what we can expect this year it is worth looking back at the last year to see what we can learn. 2011 will be remembered as a year of great uncertainty in our industry as well as in the wider economy.
Robust business models have been essential to ensure that we all have been able to guide and service our customers without compromising our high levels of quality.
I am sure that I cannot be the only person in our industry that began 2011 with a sense of trepidation. The doom and gloom headlines of 2008 were still hanging in the air and casting a shadow over the market. Coupled with pessimistic forecasts, such as the Council of Mortgage Lenders prediction that repossessions would hit 40,000, the outlook did not look bright.
The industry has been working hard to make repossessions the absolute last resort and it looks as though this has paid off. Sensible lending coupled with rational advice has made a real difference to the market and to homeowners.
While there have been a few bumps in the road I am pleased to see that our industry has proven itself to be adaptable and resilient and we seem to be entering 2012 on a positive note. In its third quarter figures the CML announced that 27,500 properties had been taken into possession, 12,500 under its original prediction.
CML data also reported that 176,100 mortgages had arrears of 2.5 per cent or more of the outstanding balance at the end of September. This is only 1.55 per cent of total mortgages and the figure is down from 178,200 at the end of June and a significant reduction from 203,800 a year earlier.
Some people may point at the CML data that found that gross mortgage lending was an estimated £13.1 billion in October, a four per cent decrease from a two-year high of £13.7 billion in September.
However, it is important to note that lending was up by 13 per cent year-on-year, an increase from £11.6 billion in October 2010 so we are moving in the right direction and we expect to continue to do so in 2012.
As we move into the New Year we feel that, as an industry, there are reasons to feel optimistic. Last month, the CML reported that monthly mortgage payments for first-time buyers were the most affordable for nearly eight years. With little or no indication that the Bank of England will raise interest rates beyond the current level of 0.5 percent the signal is that homeowners will continue to enjoy record low payments.
