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John Malone: Confidence will be the key to 2013

Watching Chancellor George Osborne’s Autumn Statement made me reflect on just how much our lives are affected by economists.

I remember many years ago, when working in the life industry, how an actuary joked about how he used to throw darts at the dartboard and used these figures for his projections.

Carrying on this analogy, the dartboard would now appear to have far larger numbers. For today’s economists, making predictions all the way through to 2018 must either be a science, or pure guess work. The famous quote attributed to Prime Minister Harold Macmillan when asked what he most feared was “Events, dear boy, events” and neatly sums up how precarious it is to make long-term predictions and how quickly they can change. Not that this will stop people trying of course.

Much of what was announced in the Autumn Statement was predictably gloomy, but not unexpected. Another six years of austerity as opposed to those many years of prudence.

On the basis that the new governor of the Bank of England does not materially change the interest rate environment, then those looking to buy or remortgage in 2013 can be assured that interest rates will continue to be competitive, and mortgage money will in my view be more widely available than at any time in the last couple of years.

Predictions for next year’s gross lending are currently in the region of £145bn to £150bn, which will certainly help the new-build, custom-build and buy-to-let sectors.

But for me, one of the key drivers will be something that economists find more difficult to predict and factor into their equations – confidence.

We only need to look back at this summer’s Olympics to see that in action. There was a great deal of scepticism in the years leading up to the event, but the torch relay and the opening ceremony changed all that. The country’s attitude quickly changed as people got behind the games and they were a huge success.

We would certainly benefit from a dose of that same positive attitude in the property and mortgage sector.

So let us all go into 2013 with a positive outlook. The MMR has, in the main, been good news for intermediaries and it was also pleasing to see that the numbers of both appointed representatives and directly regulated advisers are slowly beginning to rise.

New and existing clients should also benefit from the extra competition between lenders offering more competitive products, especially in the remortgage market. Although distributors and intermediaries may need to be tolerant with lenders next year as they implement new systems and training structures for their staff in line with the new MMR procedures.

Overall there is much for our profession to look forward to in 2013, and with a bit more confidence from all participants, £150bn of lending may indeed be a reality.

John Malone is executive chairman at PMS

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