09 November 2009
Andy Cuthbert, Managing Director of dot financial services, comments on what he thinks will happen in the financial sector in 2010.
He says:
“From my perspective a huge amount relies on the outcome from the Mortgage Market review which has been published by the FSA. It is possible from this that lenders could be forced to retract into their shell as if the recommendations come into force lenders will themselves become the main point of accountability regarding affordability. Previously, this has been a responsibility that they have abdicated to the intermediary, which is still providing the majority of mortgages for most lenders.
I hope that pressure is maintained by central government on the banks to lend which, in the main, are hugely in debt to UK taxpayers. However, whatever has been applied in the last year, they seem to have resisted pressure and used this opportunity to rebuild damaged balance sheets rather than use available capital to lend. If lenders do further constrict lending this will not be good news for anyone other than the very best of borrowers.
One bit of good news is the remaining record low level of interest rates which will make property for those able to finance their purchases extremely good value. Also, when comparisons are made year on year regarding volumes of business, we are comparing against a very low base and therefore results should be very positive.
As rates are expected to increase at some point from the half year onwards in 2010 this could lead to a huge number of borrowers looking to remortgage as they panic following a lengthy period where they have benefited from reduced rates.”
