The financial industry has itself been equally troubled, with the ongoing eurozone debt crisis hounding money markets, first-time buyers sinking to new lows, and concerns over funding.
However, before we get too depressed, 2011 has not been all bad news and the mortgage industry has remained relatively stable despite the headwinds it has faced.
Indeed, the last 12 months has brought some very good news in the shape of increasingly affordable mortgages as lenders push rates ever lower, the rising number of high LTV deals including Aldermore’s 100% guarantor mortgage, and several new lenders entering buy to let.
And while much of the year was dogged by uncertainty over the effect of such issues as the eurozone crisis, rising unemployment, austerity measures and inflation, 2011 has ended with some significant resolution.
At the last gasp, the long-awaited MMR has finally landed – all 585 pages of it plus 195 pages of stats – offering much needed and welcome certainty over the direction of the market, Northern Rock has been sold, Lloyds has confirmed the Co-op as its preferred branch bidder, and Abbey announced its launch into buy to let.
Yes, the economy remains in the doldrums and forecasts for gross mortgage lending/house prices/inflation/base rate rises etc etc are subdued to say the least. However, given how quickly things could change, they might as well be written in snow for all they are likely to last.
It seems that the only definites in 2012 are that there will be a few more surprises, unknown unknowns, some more pain and, for the optimists among you maybe, just maybe, a teeny, tiny little ray of hope of better times ahead.
But before we plunge headlong into the next 12 months, here is our round up of the best/worst stories of the last 12 – how much do you remember?
January
Regulation extension
The government announces the FSA will now regulate second-charge loans, sale and rent back and mortgage back book administration in a bid to enhance consumer protection.
Naughty, naughty
A former mortgage broker who was a contestant in the BBC’s The Apprentice show was given a nine-month suspended sentence for doctoring mortgage applications to hit sales targets. Christopher Farrell pleaded guilty to four counts of fraud.
Libellous?
In what was thought to be the first case of its kind against the FSA, the regulator was sued by a mortgage broker in a £1.67m libel case for publishing a decision notice stripping him of his regulatory permissions. His case is thrown out by the High Court in July.
Shrink shock
Economists were left shocked when ONS figures confirmed the UK economy shrank by 0.5% in the last quarter of 2010, after experts had predicted growth of between 0.2% and 0.6%.
Self build
Housing minister Grant Shapps pledged to tear down the complex bureaucracy and obstacles around self build projects, to encourage more people to build their own homes and make it a mainstream option.
February
Cutting times
Lloyds Banking Group was revealed to have cut around 900 advisers from its mortgage lending panel over the last few years, with around a third removed after the lender discovered evidence of fraud or from “dormancy” or business closures.
90% Rock
Northern Rock launched 90% LTV mortgages, increasing its maximum LTV from 85%, in a bid to boost revenue ahead of returning to private ownership.
95% new build
Taylor Wimpey launched an exclusive mortgage guarantee scheme in partnership with Mowbray Building Society and Saffron Building Society, offering two-year fixed rate 95% LTV deals for first-time buyers, with rates from 5.49%.
85% buy to let
Kensington launched a range of buy-to-let deals up to 85% LTV, with rates from 5.24%.
March
Deposit help
Chancellor George Osborne announced in the Budget a £250m package to help 10,000 first-time buyers get on the property ladder. FirstBuy Direct offers buyers an interest free, five-year equity loan of up to 20% of the value of a new build home, meaning buyers only need to find a 5% deposit themselves.
Goodbye C&G
Lloyds-owned Cheltenham & Gloucester for Intermediaries announced to brokers that it was to close and would stop accepting mortgage applications from brokers at the end of the month. Deals will remain available direct.
Hello Skipton
Skipton Building Society returned to buy-to-let lending for the first time in two years, with a range of two- and three-year fixed rate deals.
Gender bias
The European Court of Justice outlawed the use of gender-based underwriting from 21 December 2012, affecting all types of insurance including protection and dubbed a “horrible mistake” by protection experts.
Deal breaker
Mortgage Brain confirmed it has called off its acquisition of Trigold Crystal, after the OFT referred the deal to the Competition Commission.
April
Interest only
BM Solutions and Nationwide tightened their interest-only lending criteria further, insisting upon proof of repayment vehicles and limiting maximum LTVs to 75%.
Acquisition
Countrywide bought network and mortgage club Mortgage Intelligence, taking the group’s share of the mortgage industry to 6% of the total market and 11% of the intermediary sector.
Painting points
A Californian advertising agency offered to pay homeowners’ mortgages in return for turning their homes into giant billboards for the company. It received 5,000 enquiries within two days of the offer launching.
Teachers
Teachers Building Society announces it is ditching its direct-only lending stance and will launch into lending through intermediaries for the first time from May.
Credibility
Departing MPC member and super hawk Andrew Sentance warns that the Bank of England is at risk of losing its credibility if it does not increase interest rates in order to tackle inflation.
May
FTBs
Nationwide launches a 95% LTV saver deal for first-time buyers, offering potential homeowners a regular savings account for cash to put towards a 5% deposit. First-time buyers are eligible to apply for the 95% deal after six months of saving.
2013
Former Treasury adviser Roger Bootle says the Bank of England won’t seek to increase base rate until 2013 in the face of a weak economy, a day after governor Mervyn King dismissed the prospect of an early rise.
Premium pricing
Halifax relaxes its interest-only stance by scrapping its interest-only pricing differential and doubling the maximum amount interest-only customers can borrow to £1m.
Rate slash
Coventry Intermediaries cut interest rates on its buy-to-let range in a move that an insider suggested would “shake up the market” and “upset some lenders”, with trackers from 2.79% above base up to 60% LTV.
June
Non-advised sales ban
The FSA refused to rule out a ban on non-advised sales, saying it could prove a useful tool. However, 70% of the industry said it was opposed to the proposal.
Biggest ever fraud
A chartered surveyor and property investor were jailed for a total of 20 years for their part in a £50m commercial mortgage fraud, believed to be one of the biggest cases of its kind.
Broker risk
Lenders branded third party suppliers, including brokers, solicitors and valuers as among the main sources of fraud risk, provoking AMI to hit back saying just as much fraud was being uncovered from within the banks.
Castle Trust
Ex-FSA chairman Sir Callum McCarthy is to launch a new mortgage lender called Castle Trust, offering homebuyers loans of up to 20% of the value of the property, enabling borrowers to access 60% LTV mortgages from other lenders.
Walsh quits
CML chairman and Lloyds managing director of mortgages Colin Walsh confirms to Mortgage Solutions that he is to leave to explore “other opportunities”.
July
2014 rate rise?
Experts predict that it could well be 2014 “at the earliest” before the base rate increases above its historic low of 0.5%.
Conveyancing implosion
Writing for Mortgage Solutions, Optima Legal partner David Duckworth warns that negligence and fraud have left the conveyancing sector on the verge of imploding.
Rateorama
Abbey for Intermediaries launches a fee-free two-year fixed rate mortgage at just 3.35% up to 70% LTV for one week only – one of a series of incredibly competitive one-week only deals the lender launches.
Desperate measures
Mortgage fraud in H1 increasingly showed the marks of struggling borrowers failing to meet lenders’ strict criteria, with 24% attempting to hide adverse credit history linked to an old address, according to CIFAS.
Mutual innovation
Chelsea Building Society launches 90% LTV fixed rate deals from 4.39%, while Saffron Building Society unveils a 95% LTV rent-to-buy deal for first-time buyers, enabling them to use their rental payment history to show they can afford the mortgage payments.
August
New historic low?
Experts suggest that that a base rate cut to 0.25% is more likely after the Bank of England revised its growth forecast down, but will be resisted by the Bank in favour of quantitative easing.
Most wanted
A mortgage broker is among Crimestoppers’ ten most wanted fraudsters in the UK, wanted by police for submitting £5.7m-worth of fraudulent mortgage applications.
100% and BTL launch
Lender Northern Bank confirms its return to 100% LTV mortgage lending for the first time since the credit crunch, while Accord launches into buy to let for the first time.
Mutual upgrade
Six building societies are upgraded by Moody’s reflecting its confidence in their performance since the crisis and positive expectations for the future.
10-year fix
Chelsea Building Society launches a ten-year fixed rate mortgage at just 3.99% up to 70% LTV.
September
Aldermore
Aldermore launches a 100% LTV guarantor mortgage to help first-time buyers get on the property ladder with the help of their parents.
Downton backlash
Aviva faces negative reaction to its income protection adverts running alongside ITV’s Downton Abbey, with viewers complaining on Twitter the ads are “depressing”.
Tesco delay
Tesco Bank’s much-talker-about launch into mortgages has been delayed until early 2012, after it had been expected to reveal its products in summer 2011.
Fifth fine
The FSA fined a fifth mortgage lender, Swift 1st Ltd, £630,000 for unfair treatment of customers in arrears. It must also pay around £2.35m in redress to customers.
October
Commission cut
Paymentshield informs brokers their commission will be cut from 27.5% to 5% on 1 November if they have not written any business with the provider over the last 12 months, provoking a storm of protest.
Abbey for brokers
Abbey for Intermediaries boss Miguel Sard tells Mortgage Solutions it plans to distribute all retail products through brokers, alongside confirming it is set to launch into buy to let.
SVR hit
The Bank of Scotland and The Mortgage Business confirmed they would increase their SVR from 4.84% to 4.95% on 1 November, affecting around 175,000 customers.
BTL x4
Barclays reveals it will quadruple its buy-to-let lending in the next 12 months to a minimum of 10% of the all the lender’s mortgage business.
November
Virgin buyout
Virgin Money is revealed as the buyer of Northern Rock for £747m in cash, with the Rock saying intermediaries will remain at the “heart” of its business following the merger.
Govt strategy
The government revealed its housing strategy, including plans to underwrite a new build mortgage indemnity scheme with housebuilders, enabling lenders to provide 95% LTV loans to 100,000 buyers.
New lenders
Legal & General reveals it is in talks with six potential new lenders, with two set to launch to market as early as 2012.
Redress
Halifax is forced to pay compensation to a further 250,000 customers over confusion about its SVR cap, adding to the 300,000 it has already paid compensation to in February.
Holiday is over
The government said in its autumn statement that the Stamp Duty holiday for first-time buyers has proved “ineffective” and it will be scrapped as planned at the end of March 2012.
December
MMR
The FSA finally published the final Mortgage Market Review consultation paper, after promising it by early autumn. It confirmed non-advised sales would be banned, all mortgages must have income verified and affordability assessed, and interest-only borrowers must show a “believable” repayment strategy.
Preferred Co-op
Lloyds Banking Group has confirmed The Co-operative Group as the preferred bidder to buy 632 of its high street branches, potentially making the mutual the seventh biggest lender in the UK.
PPI
Redress paid to customers complaining about the sale of payment protection insurance (PPI) hit £1bn in 2011, according to figures from the FSA.
2012 rates rise
The Bank of England said that mortgage interest rates could increase next year, as lenders pass on the increased costs of wholesale funding.
Forecast revision
The CML wiped £17bn off its forecast for gross mortgage lending in 2012, dropping it to an expected £133bn with just £5bn in net mortgage lending.
Abbey launch
Abbey for Intermediaries launches into buy-to-let lending, with a range of deals for non-professional landlords with up to two buy-to-let properties with the lender.
