You are here: Home - News -


  • 31/01/2003
  • 0
If there is a downturn in the housing market, how vulnerable are some of the newer and smaller lenders? Should I be looking towards the bigger players in the interests of safety when placing my business?

First things first, we should all remain confident about the housing market. The outlook for both the short and long-term property market is positive and underpinned by strong fundamentals: low interest rates, high levels of employment and a low proportion of new borrowers’ earnings taken up by mortgage payments ‘ this figure currently stands at just 15%. Combined, these factors will continue to provide a solid foundation for housing demand over the coming year.

In the most recent HBOS Economic Forecast (December 2002), house price inflation was forecast to slow gradually from 26% in 2002 to 9% in 2003.

The difficulties that increasing numbers of first-time buyers are facing in getting a foot on the housing ladder will curb demand causing house price growth to slow. As a result, we expect a gradual slowdown in house price inflation, rather than anything more dramatic.

It will also provide comfort to know the UK banking sector is regarded as one of the strongest and best managed in the world. For example, credit rating agencies rank many of the UK’s lenders highly. Not only that but the Financial Services Authority’s (FSA) recently gifted ‘super-regulator’ status and far reaching powers ensure the strength and liquidity of the UK financial services sector is constantly monitored.

The FSA works closely with lenders to regularly ‘stress-test’ how their mortgage books would withstand any economic downturn ‘ so there should not be any unnecessary cause for concern.

Martin Ellis


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
The balance of power

Following the sea change prescribed in 2002, what developments will we see this year that could tip the balance of...