Knight says the mortgage industry has gone back to the 1970s, resembling the TV programme Life on Mars. He forecasts the current climate will continue for a further 18 months.
He says: “I don’t think it is the beginning of the end but the end of the beginning. We have still got the rest of this year to go through but I think we are now facing a £100bn shortfall in gross advances.”
Such a fall would see last year’s figure of £360bn drop to £260bn but Knight points out this would still be one of the highest totals on record.
He says: “My personal belief is that the current climate will go on for 18 mon-ths. Things for the medium term are not as gloomy as some commentators are predicting. I do not think it is going to last several years.”
Knight says mortgage intermediaries need to get their costs down to below their income to survive.
He says: “Brokers have got to have a realistic assumption about what business they can place. They must get rid of their infrastructure now rather than waiting for any comeback in 2008. The UK mortgage market will not die but brokers need to make realistic projections.”