DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The market was in turmoil at the start of 2009, but ended the year in slightly better shape 2
Gross lending continued to fall in 2009 2
Macroeconomic factors played a major role in suppressing demand for mortgages 3
The economy contracted throughout most of 2009 3
The base rate remains at a historically low level 3
Gross lending was subdued throughout 2009, but was slightly higher in the second half of the year 3
The low base rate has severely reduced the demand for remortgaging 3
Remortgaging suffered the largest fall of all types of mortgage in 2009 3
Bank of England data confirm the collapse in demand for remortgage credit 4
The supply of mortgage credit has yet to recover convincingly following the banking crisis 5
Q1 2009: there was a continuation of the tightening of supply seen throughout 2008 6
Q2 2009: the availability of credit rose for the first time since the survey began in Q2 2007 6
Q3 2009: a slight relapse saw credit availability diminish a little 7
Q4 2009: credit availability increased once again 7
The number of mainstream mortgage products has improved slightly over the last 12 months 7
The wholesale funding drought has had a huge impact on specialist lending 7
The RMBS market has barely started to recover from the aftermath of the credit crunch 9
The end of Bank of England and government support could jeopardize market recovery 10
The mortgage industry has been critical of government initiatives on mortgage funding 11
Regulatory developments may also serve to dampen growth 11
The MMR aims to ensure that the mortgage market is sustainable and effectively meets consumers' needs 11
The Treasury has also recommended extending the scope of regulation 13
The mortgage industry has expressed its concern with some of these proposals 13
A number of key trends and factors will shape a gradual revival in 2010 14
The market was surprised by a sustained recovery in property prices 14
Despite the price rises of 2009, observers are cautious about the prospects for 2010 16
The market dipped at the start of 2010, caused in part by the end of the stamp duty holiday 16
Rising prices have contributed to an improvement in the supply of secured credit 17
Upward pressure on SVRs may lead to a limited recovery in remortgaging activity 18
A few lenders have started to increase their SVRs despite the lack of an imminent rise in the base rate 18
Larger providers are less likely to raise their SVRs 19
Remortgaging levels are likely to remain subdued for most of 2010 at least 20
First-time buyers have found it extremely difficult to enter the market 20
The supply of high LTV products will improve only slowly 21
The small improvement in credit availability is not offsetting the requirement for ever larger deposits 23
Several providers are trying to address the needs of first-time buyers 24
Spreads between fixed mortgage rates and market interest rates are starting to narrow 25
Lenders are slowly starting to compete for market share once more 26
Arrears and repossessions are not rising as quickly as feared 27
A modest rise in arrears and repossessions is predicted for 2010 28
The FSA signals its concern on the potential vulnerability of households to debt 29
Datamonitor forecasts a modest increase in gross lending over the next few years 29
Gross lending is expected to reach £285 billion in 2014 29
In the optimistic scenario, a strongly recovering economy will push gross lending to £350 billion in 2014 31
The pessimistic scenario envisages gross lending rising to £230 billion in 2014 32
APPENDIX 34
Supplementary data 34
Definitions 45
Bank of England base rate 45
CAGR 45
Gross advances 45
Remortgaging 45
RMBS 45
Self-certification mortgage 46
Methodology 46
Forecasting methodology 46
Further reading 48
Ask the analyst 48
Datamonitor consulting 48
Disclaimer 48
List of Tables
Table 1: Forecast gross advances under the Datamonitor view, 2010-14 30
Table 2: Forecast gross advances under the optimistic view, 2010-14 32
Table 3: Forecast gross advances under the pessimistic view, 2010-14 33
Table 4: UK gross annual lending (£m), 2003-09 34
Table 5: Gross mortgage lending by product line, 2004-09 34
Table 6: Net balance of lenders reporting increase in demand for remortgage credit 35
Table 7: Net balance of lenders reporting improvements in credit availability and credit scoring criteria 35
Table 8: Index of gross lending by specialist lenders and MFIs (Jan 1994 = 100) 36
Table 9: Public issuances of residential mortgage-backed securities (£ billion) 38
Table 10: Monthly and annual changes in house prices, January 2007-January 2010 39
Table 11: Net balance of lenders reporting that an increase in house prices is boosting credit availability 40
Table 12: Interest rates on fixed-rate mortgages 41
Table 13: Net balance of lenders reporting an increase in mortgage availability 42
Table 14: Net balance of lenders reporting an increase in maximum LTVs 42
Table 15: Average size of deposits paid by first-time buyers, January 2007-December 2009 43
Table 16: Comparison of interest rates, 2007-10 44
Table 17: Arrears and repossessions, 2004-09 45
List of Figures
Figure 1: Gross lending in 2009 was 60% lower than in 2007 2
Figure 2: Gross lending for purchases bottomed out in 2009, but remortgaging fell sharply 4
Figure 3: Data from the Bank of England highlight the depth of the fall in remortgaging activity 5
Figure 4: Mortgage credit availability has improved slightly since the first quarter of 2009 6
Figure 5: Gross lending by specialist lenders has collapsed over the last two years 8
Figure 6: The issuance of mortgage-backed debt has virtually dried up over the last two years 9
Figure 7: House prices started to recover in March 2009, showing an annual increase by the end of the year 15
Figure 8: Impact of house price expectation on availability of credit 18
Figure 9: Rates on high LTV mortgages failed to track the base rate as it fell 20
Figure 10: The availability of 75%+ LTV mortgages started to improve at the end of 2009 21
Figure 11: Only at the end of 2009 did lenders start to report an increase in maximum LTVs 22
Figure 12: The absence of low LTV loans offset the impact of lower house prices for first-time buyer deposits 24
Figure 13: Margins between fixed-rate mortgages and the base rate have gradually narrowed in recent months 26
Figure 14: Arrears and repossessions rose at a slower rate than feared in 2009 28
Figure 15: Gross lending will reach £285 billion in 2014 in the view of Datamonitor 30
Figure 16: Gross lending will hit £350 billion in 2014 under the optimistic scenario 31
Figure 17: In the pessimistic forecast, gross lending will rise only gradually to £230 billion in 2014 33
[Inhaltsverzeichnis ausblenden]
