economy


people says they intend to buy in 2012 but said the main barriers to house purchase were raising a deposit, obtaining a large enough mortgage and fears over job security. Other research from L&G


found the Bank of Mum and Dad is expected to contribute up to £50,000 in


financial


support to their children over the course of their life while figures from the CML show parents assisted 84% of purchases for first-time buyers below the age of 30 in 2010. For those in the position


to be able to raise sufficient funds the choice of mortgage deals on offer has soared by 87% in the past 12 months Mortgage Brain claims. Product


availability


increased for 10 consecutive months throughout 2011 although fell back marginally in October and november. 2011 saw more than 6,500 products introduced taking the total number of live mortgage schemes listed on the market from 7,519 to 14,052 in December.


Pastures new by


Robert Sinclair director AMI


As we transition out of the old and into the new, never in my life have I felt less certain about what a new year might hold. With the travails of the great Euro- pean experiment, never has there been more uncertainty. Whether I am looking at the macro-political picture or the possibilities for the Associa- tion of Mortgage Intermedi- aries, it is hard to draw any firm conclusions. However, assuming that our European partners solve the conundrum and avoid the Germans paying for ev- erything, then the domestic scene is more certain. Base rate will continue at rock bottom for at least another year, although the cost of funds will increase, so mort- gage and interest rates will drift higher. The pressure on capital and liquidity will continue to cause pressure for the state owned lend- ers. However there is hope


that the mutual sector and a further smattering of new entrants can fill the gap this will create. So £135bn of gross lending in 2012 still looks plausible.


The domestic economy continues to look set for a few years of tough realign- ment. Debt must be reduced and savings established. The cash that many firms are hoarding on balance sheet will at some point be put back to use as they perceive confidence returning and the opportunity for profits. Inflation will begin to fall in 2012 and we can expect unemployment to peak well short of 3m. For brokers there are more big tranches of fixed rates maturing in early 2012. Many of these will bring oppor- tunity as their default rates are not as advantageous as maturities in previous years. We will not see the recent government initia- tives deliver more houses quickly, so a bigger market will come in late 2012 and realisti- cally 2013. Buy- to-let will be “the great hope”, as will continued hard work on ensuring


Fast-building a reputation as the home for BTL.


Whatever the Bank of England’s decision on base rates. Aldermore has it covered with a full range of variable and fixed BTL mortgages...


proper financial plans, with customers properly insured, protected written under the right trust deed, with wills written and appointed Power of Attorney.


At a higher level, we continue to study the various outputs from Brussels on the new mortgage directive. Grasping how the Commis- sion, Council and Parliament interact is tricky in itself. Ensuring that the outcome still allows brokers in the UK to flourish is the daily challenge. I think we are al- ready on our twentieth draft, with many more to come. Implementing the Mortgage Market review will absorb at least part of our time in coming months as we get to grips with the latest set of proposals. There is much to do but with a positive mental attitude, helping customers to do the right thing will deliver long term reward.


FOR INTERMEDIARY USE ONLY


To find out more call 0333 321 1000 aldermore-mortgages.co.uk


MOrTGAGE InTrODUCEr JANUARY 2012 5


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