MIp14-15_1209:MI 12 Jan 24/11/2009 17:26 Page 21
2009 | 15
indicators of
welcomed consumer
confidence justifiably returning to the market.
Turning to the issue of interest rates, this deals. However, as the year progressed a This choice will enable intermediaries to
continues to be a subject that captures the common theme emerged there was increasing continue offering the best advice available so
imagination of the country. Record lows have confidence in the longevity of the current 0.5% that borrowers remain best placed to deal with
been experienced for an extended period of time Bank of England base rate which appears to have their financial future.
since the consecutive falls from October 2008 to resulted in an increase in the uptake of tracker
the last cut - again at the time of writing - in deals. Funding
March 2009. The obvious question now on the However, funding issues have inevitably
lips of the industry is when rates will rise again? Products remained evident in 2009 and these will
Now this is not to suggest that there has been a continue into the new year. There is sadly no
Interest rates major swing away from fixed rate deals, as there getting away from this and there is no quick fix
Well, according to an article on are some great products still available, but it does on the horizon. But the degree of competition
thisismoney.co.uk, the average forecast of appear that the popularity of tracker deals is on and good value deals that have come back to the
economists polled by Reuters in October showed the increase. Indeed, October research from market will help provide the platform for
that the Monetary Policy Committee is expected Legal & General Mortgage Club said that almost increasing numbers of strong, innovative
to hold the current bank rate of 0.5% until at one in five of the mortgage applications it saw in mortgage products.
least July 2010. The poll also goes onto add that Q3 2009 were for tracker rates - up from 12% in So looking ahead it may sound odd but all I
rates were then viewed as rising to 0.75% by Q2. want from 2010 is a 'boring' year. By that I mean
September and to a level of 1.0% by the end of It has also been noted that over this period I expect the market to maintain a similar size,
2010. more borrowers are also using this confidence to hopefully creeping up a little in terms of lending
This makes interesting reading especially benefit from lifetime trackers. This has been volumes and application levels but without the
when I compare it to some of the discussions we especially apparent at Woolwich since the recent drama of highs and lows. Whilst I also expect the
have had amidst a series of broker lunches we reduction of the early repayment charge period lending forerunners to maintain a similar
embarked upon throughout the year where we on our lifetime tracker deal. Offset trackers have market share.
discuss the market, exchange views on the also seen an increased uptake which again isn't It's important that we, as an industry, don't
mortgage environment and try to address any that surprising when you consider the low levels get too carried away and put 2010 on a pedestal
concerns. Within these discussions the key, and at which savings rates currently reside. as being the year the market comes back. But
reoccurring, topic has been regarding the bank So whilst various types of tracker deals have having said that, let's allow ourselves a small but
base rate. As you can imagine there was often been flavour of the month towards the back-end justified ray of hope to enter our business, after
differing opinion which also opened up the of 2009, it is important that lenders continue the couple of years we have had to endure it's
debate over the virtues of fixed rate and tracker offering competition across all product fields. something we could all do with.
www.mortgageintroducer.com December 2009 Mortgage Introducer
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