But with lenders still reeling and the FSA postponing decision-making on the sector, where does the balance of power lie now – who has ultimate responsibility for reigniting the mortgage sector?
Lenders have carried the can for the mortgage stalemate. They have been an easy target – if only they would start lending, relax their criteria, stop paying huge bonuses and pull themselves back from the brink of collapse. But with fewer active lenders and the “irresponsible” sales culture of the boom being replaced with a more cautious approach, we have a market that lacks tension and it is this lack of tension that stalls market recovery.
Rather than harking back to the glory days, those who want to remain in the sector for the long term need to get over ourselves and accept this new world. We need to find ways to work within the new rules before a generation of wannabe homeowners become disenfranchised.
What are the new rules? We can all work to a new operating model but changing the regulatory goalposts feels akin to death by a thousand cuts.
The FSA’s September paper will consider reforms of the mortgage market but we cannot delay until then, especially given that we are unlikely to see definitive action this year.
Fiddling with loan to value, capital adequacy and product regulation and whatever else is on the regulatory wishlist will not address the supply/demand issues that affect affordability, nor the lack of confidence illustrated by the dire state of mortgage lending.
Where does that leave those of us who think we are ready for a new era in mortgage lending? The word on the street is that demand is growing for the usual suite of two, three and five-year fixed-rate and tracker mortgages.
Whether or not this is the green shoots of recovery, buyers looking for bargains or the pent-up demand of buyers who would normally be seeking to move on and up, one thing is certain – this is not a new breed of toxic debt.
Gerry O’Brien is chief executive officer of Home of Choice.