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Build on success of the market

Autumn is the time of year when we have the opportunity to attend events focused on issues relevant to our business.

What are some of the key issues that we need to be thinking about?

There seems to be general agreement that the trend for interest rates in the short term is still up. The major players all seem to agree even about the likely rate of house price inflation with nobody predicting that the market is in danger of collapsing.

There is, however, more evidence that there is recognition of the dangers that might exist for individuals. Not all buy-to-let developments are finding ready buyers. Some investors are finding that the market has its difficulties for those who fail to understand the mechanics and risks involved. There is also recognition that some of the affordability calculations that are being applied may also act to enable some individuals to take on levels of borrowing that will leave them acutely sensitive to the predicted (moderate) rises in interest rates, coupled with the rising costs of council taxes and utilities. The overall stability of the market could be badly affected if any of these elements cause forced sales, typically driving down prices.

This concern over affordability also features heavily in the information on current regulatory concerns being highlighted by the FSA. Overall the industry should take significant pride in the results of recent investigations. On all fronts significant improvements are being reported and we are all aware through the published thematic activity report of the areas that are still being addressed.

However, while some have improved, others are still failing to meet the required standards and while the guilty have in most cases still to be named, we are being told that more firms are being passed to enforcement.

As I have previously said, I have no problem with the FSA using all its powers to ensure that proper standards are followed throughout the sector but we need to pay particular attention to the way in which the misdemeanours of the few are reported, lest they cause consumer concern over the general high standards of behaviour.

As an observer at events, the lack of understanding of some individuals still leaves me astounded. Questions are asked regarding the role of the intermediary and the responsibility for advice where a packager is used, the responsibility for ensuring that a client can afford the recommended product. The FSA tells us that it has uncovered an adviser who had not bothered to become qualified,

The history of the mortgage sector over recent years has been amazing. The growth of borrowing has been phenomenal. The price of property has grown year on year and a significant part of this has been the improvement that has taken place in the quality of the homes we live in. The great majority of housing now has lots of TLC lavished upon it and any of us live in beautiful homes which provide for our comfort and also our leisure.

The recent economic success that the UK has enjoyed can be traced to the performance of the housing market.

We owe it to ourselves and to our clients to continue to focus on providing a great and professional service.

Richard Fox is chief executive of the Society of Mortgage Professionals

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