One certainty is that the consumer really will be king next year. If borrowers think they are spoilt for choice now when it comes to selecting a mortgage, just wait until 2006.With Deutsche Bank, Investec, the Oakwood Group and ING all planning to enter the mortgage market, it is going to be a busy year for the industry. Such activity will be welcome, given that this year has been rather flat. As the housing market has slowed, lenders have struggled to devise innovative or exciting propositions for borrowers. Next year looks set to be even more of a challenge than 2005, which is not good news for brokers who are already struggling. The Council of Mortgage Lenders predicts that gross mortgage advances will be 280bn but more pessimistic forecasters have suggested that lending levels could fall to as low as 200bn. The advantage of new lenders coming into the market is that they have a clean slate. They have no back book, which will enable them to be more aggressive in their pricing and generating new business. The downside, of course, is that new lenders do not have the financial muscle of big providers such as HBOS but established lenders will have to compete to maintain their market share, which should result in good value products. Wider choice and more innovation is just what the market needs. It is not just first-time buyers or homeowners with mainstream mortgages who are set to benefit either, as the non-conforming sector is likely to be the focus for many of these new lenders. The highest margins can be generated in sub-prime and adverse lending, although increased competition will ultimately drive down rates – and margins – in both areas. But increased competition in this sector will not be appreciated by lenders in this market, or indeed brokers, if procuration fees are driven down as a result of these declining margins. To offset this, brokers will have to offer a broader proposition to clients. Greater innovation does not just result in cheaper rates but also more features. Offsetting is likely to feature more widely, with prices already coming down and a range of fixed rates introduced to rival non-offset deals. An increase in mixing and matching of different rates to suit individual circumstances is also likely to grow in popularity. Lenders and brokers who are flexible and innovative will be successful in 2006 but the real winner will be the consumer – as long as they seek independent advice from a broker with access to the whole of the market.