Lending forecasts for 2011 look like following a similar level to 2010, with the Council of Mortgage Lenders predicting lending will be around the same as last year but with property transactions falling by 30,000 to 860,000.
Brokers acknowledge this year will be difficult but some say there will be opportunities.
London & Country head of communications David Hollingworth believes there could be improvements in some areas.
He says: “I do not think there will be any growth this year, which lots of people have been saying already. Broadly, we are looking at more of the same. It is fair to say we have seen a slight upturn in remortgage activity. Depending on the products out there, that could well continue. If we get close to a point where people start to think that a rate rise is imminent, that will spark more movement.”
Chadney Bulgin mortgage partner Jonathan Clarke considers the buy-to-let market will shine. He says: “Buy to let is looking good. It is probably the one area of the market that will be good. With mortgages becoming harder to get, more people will be forced to rent.”
He says the market is in desperate need of more high loan-to-value products but the CML does not think this is likely as uncertainty over the mortgage market review will “reinforce lenders’ caution”.
This is a major concern for Abacus Financial director Matthew Fleming-Duffy. He says: “My thoughts remain focused on the MMR. Some common-sense regulatory measures have been emerging, such as the revised procedures relating to distribution. However, the regulator must be careful not to clamp down on a weakened homeloan market. If the UK housing market fails, the effects could be devastating for the wider economy.”
Hollingworth says: “Everyone is looking for prime, low-risk business and that is where they will stay focused.”
The CML says another barrier will be funding difficulties. It says: “Over the short to medium term, lenders will need to manage some large-scale refinancing of wholesale funding. From April next year onward, lenders will have to begin to repay the funding advanced through official support schemes. This is likely to limit the availability of credit to support mortgage lending next year and beyond.”
But Emba group sales and marketing director Mike Fitzgerald is upbeat about 2011, saying it could be a year where brokers increase their earnings but only if they are proactive in approaching clients.
He says: “This year is going to be a year when brokers earn more than they did in 2010 but they are going to have to go back to speaking to their clients.
“We have had to do mailshots, send emails and call people rather than just sitting there like five years ago and waiting for customers to come through the door. All in all, for the broker that likes to talk, this year will be quite good.”