Auld Lang Syne: 2009 best forgotten?

Tuesday 15th December 2009

By Michael White, chief executive of online mortgage adviser, www.emailmortgages.com

It’s not long now until we’ll all be singing ‘Auld Lang Syne’ at a raucous, celebratory New Year’s Eve party surrounded by our nearest and dearest; either that or we’ll be at home, asleep in a comfortable armchair with Jools Holland bellowing inanely at his Hootenanny guests and waking up to find that we’ve missed midnight and are now forced to walk around on New Year’s Day with a painful crick in the neck.  Such is life.

2009 is nearly over, which gives us chance to reflect on a year which many will simply be glad is complete.  I’m not a great fan of wishing your life away but as far as I can work out the last 12 months have been pretty rubbish for everyone unless you’re: a) Simon Cowell, b) Simon Cowell’s accountant, or c) the person who whitens Simon Cowell’s teeth. 

I’ve heard 2009 described as “an up and down year for the mortgage intermediary sector”, which immediately got me looking for that elusive ‘up’.  To be fair, as the year comes to a close there have been a number of, shall we say, slight positives which while nowhere near enough to get us all dancing on the ceiling, do perhaps point to a rosier 2010.  I say perhaps because as we’re all aware any ‘recovery’ in the wider economy is fragile and the pack of cards that now stands in for UK plc could come crashing down at any point.

So, in a mortgage sense where are we?  I seem to have spent most of 2009 calling for lenders to lend and to lend at levels, which do not require the average first-time buyer to somehow come up with the best part of GBP 50k to get a mortgage.  It has taken the full 12 months but we may finally have turned a corner in this regard with the number of 90 per cent LTV deals increasing and, while these will never be at the most competitive rates, prices on these products are becoming keener.  Praise be.

Lenders do seem to have more appetite to lend now and with a couple re-entering the fray we should hopefully see more competition across the board, save for some notable exceptions.  Self-cert mortgages being one such sector, which is unlikely to see competition return any time soon, if ever.  The FSA has decided, in its infinite wisdom, that the market for self-cert products is too risky and it signalled its death in the Mortgage Market Review (MMR).

One could spend the rest of one’s life writing about the FSA’s failings but who can be bothered?  I will just re-iterate the point I made earlier in the year that, at the time, our regulator seemed to have adopted a ‘kill or cure’ approach to the mortgage market.  By the time the MMR had come out, this looked like it had changed to a ‘kill to cure’ purging of all that it deemed ‘bad’ in the market.  It is depressing in the extreme and we must wonder what will come next, however, given a significant response from the mortgage intermediary community re: the MMR, we can but hope that common sense prevails and the FSA do not throw the baby, rubber duck, loofer, and soothing pomegranate bubble bath out with the bath water.

In intermediary land, dual pricing continued to be a major issue for all advisers.  This has not really changed, despite the fact that our trade body at one point declared lenders’ dual pricing policies as an issue for advisers to be over.  George W Bush and ‘Mission Accomplished’ immediately sprang to mind – nonsense of course and we are still working in a market where a considerable number of highly competitive products are not available to advisers.  One hopes for change on this front too and as lenders’ do seek out more business we must push relentlessly for the intermediary channel to be used to deliver it.

At the end of any year there is often a sense of world-weariness, and let’s be honest, the Pre-Budget Report would have done nothing to change this.  Positive steps for the market have been few and far between and the Government could have maintained its helping hand for the mortgage and housing market with a continuation of the stamp duty holiday and an extension of the 15 per cent VAT rate.  Neither was forthcoming which means more money must be found by prospective purchasers – and I thought I heard Alistair Darling describe the UK housing/mortgage market as much more important to the UK than in other European countries?  If this is truly the case there more should have been done to continue this support.

We all know that 2009 has been tough, and the likelihood is that 2010 looks just as challenging.  That said, if you are reading this then you have presumably survived so far, and perhaps by this time next year we will all have real cause to celebrate.  Whatever the future brings, enjoy the Christmas and New Year holidays and I look forward to catching up with you in 2010.

Michael White is both founder and chief executive of online mortgage advisers, Email Mortgages. Email Mortgages was established in 2008 and is a mortgage advisory practice providing consumers with tailored fee-free advice online via email.  Michael has been working in financial services for over 30 years and been involved in a number of new business start-ups including Chase Manhattan Homeloans, Legal & General Mortgage Services and Kensington Mortgage Company.  His last job prior to Email Mortgages was as founding director of the lender London Mortgage Company, established in 2001 and sold to Lehman Brothers in 2006.