The Christmas ads are already on TV and it seems an opportune moment to look back on 2010 and forward to 2011. Is there light at the end of the tunnel?
The best guess for the size of the mortgage market in 2010 is £135bn, well south of the highs of 2007, which hit £363bn. The intermediary share of this is likely to be 50 per cent, or £67bn, compared with 80 per cent, £290bn, in 2007. The market is less than a quarter of its former size.
I recently met with our lending partners to review plans for next year and I am sorry to say the majority expect a similar sized market for 2011. One or two predict small growth to £150bn. We should take comfort that no one is predicting a smaller market, so 2011 could be the year when it stops getting worse.
The number of live mortgage schemes available to brokers is at its highest level since October 2008, according to statistics from Mortgage Brain. On November 1, the total number of schemes stood at 7,654. Also, ING is making great progress with its offering and other niche lenders have returned or are in the throes of returning.
Interest rates hold the key but when the nine members of the monetary policy committee cannot agree, how can we guess where they are heading? Predictions range from base rate going nowhere for five years, to 8 per cent within two years.
Our role is to give advice, not try to predict interest rates but those customers parked on standard variable rates of 2.5 per cent or higher are worth a call to discuss de-risking their situation, especially with five-year fixed rates now available below 4 per cent. For those fortunate enough to be on trackers with pay rates well below 2.5 per cent, a base rate rise is probably needed before they take action but you must keep in touch with them or someone else will.
Tragically, there are fewer than 10,000 mortgage brokers left but those that remain have clearly demonstrated over the last couple of years the robustness of their business model. I believe we will look back on 2009 and 2010 as extraordinary years that will never be repeated. Perhaps we will also reflect on 2011 as the year when it finally started to get a little bit better.
Mark Harris is managing director of Savills Private Finance