Datamonitor, the self-titled home of
business intelligence, is forecasting a strong recovery period for the UK
mortgage market. A new report by the market analysis experts indicates that by the year 2010 we will have seen a 13 per cent increase in the
residential mortgage market, to the value of £324 billion. However, before the recovery begins to happen, Datamonitor predict another two years of relative calm.
The forecast was not all positive. A key
financial analysis expert at Datamonitor who authored the report predicted a slow market for the next two years. Further problems such as rising bad
debt and expensive regulation were seen as posing further threats to
lender business.
In terms of regulation, new initiatives are rife at the moment, with more forecast for the immediate future. These include Basel II, the Treating Customers Fairly initiative, HIP (Home Information packs) and new forecast changes to
payment protection insurance legislation. Traditionally, new regulation impacts on the
mortgage market and indirectly on the
consumer as costs go up.
Bad debt is always a problem for
lenders, and Datamonitor highlight the concern that borrowers will not be able to handle the weight of their
loans . This could directly impact on the overall profitability of lenders .
