At the end of last year, the CML revised down its 2012 UK lending prediction to £133bn and IMLA went even lower to £130bn.
Robert Sinclair, director of the Association of Mortgage Intermediaries, was a little more optimistic: “The state-owned banks – Lloyds Banking Group and Royal Bank of Scotland – will remain under pressure in 2012, but pent up demand is likely to push lending closer to £140bn than £130bn next year.”
Lloyds, the UK’s largest lender for now, said a lot depends on how some of those wider economic issues play out. “But by continuing to offer a good range of products combined with great service to broker’s customers we can get off to a good start,” said Ian Wilson, head of sales for Halifax for Intermediaries.
At the risk of sounding simplistic, mortgage lenders want to lend and if the Eurozone finds solutions quickly that settle the money markets, behind closed doors, some lenders are predicting 2012 lending figures of closer to £170bn next year.
The mutual sector, although still relatively small at £20-25bn of lending in 2011, covered itself in glory in brokers’ eyes.
Several building societies singled themselves out by fostering broker relationships, launching ambitiously innovative products and tailoring those products to market need.
However, falling savings levels are expected to rock the more fragile building societies’ funding models and bring yet more consolidation this year.
Nevertheless, smaller building societies like Teachers, Cambridge and Buckinghamshire marked themselves out alongside bigger innovators like the Nationwide, Yorkshire, Coventry, and Leeds building societies.
News that the Co-op is the favoured bidder for the Lloyds branches was yet more good news for the sector and would make the Co-Op the seventh biggest lender in the UK if the branch and mortgage book sale completes.
Back in the banking world, new bank Virgin Money came out fighting yesterday, mirroring industry-darling Coventry Intermediaries with service pledges for the intermediary market ahead of its imminent mortgage launch.
Tesco Bank is also waiting in the wings and unconfirmed rumours are circulating that two new lenders are weeks away from authorisation so set for launch in Q1.
For first-time buyers, after all the industry hand-wringing about the lack of fresh-blood, as mortgage costs dropped like a stone new buyers jumped by almost a third in 2011, albeit from a low level.
Mortgage rates are on the rise, but the bustle is also expected to continue in Q1 as first-time buyers rush to get applications in before the end of the Stamp Duty holiday on 24 March and the government’s new-build mortgage indemnity guarantee scheme (hopefully) launches in the spring.
Nationwide’s managing director of group intermediary sales, Ian Andrew, confirmed this view, saying: “We’ll see a lot of first-time buyer activity this quarter, although a lot of lenders are still working out the finer detail on the mortgage indemnity scheme.” Buyer affordability could be undermined by the austerity measures this year, he said, but even so, 2012 will still be more comfortable for first-time buyers.
The industry’s guiding light, the buy-to-let sector, went from strength to strength last year. Consider all the “me-too” launches in the buy-to-let market, including Santander, joining buy-to-let heavyweights The Mortgage Works and BM Solutions.
Among them, Woolwich is expected to take a more aggressive stance in 2012 and Santander’s gentle re-launch into buy-to-let in December is predicted to gear up into a hunt for market share bringing further competition later this year.
Any industry will always err on the optimitic when it talks about itself, especially when that market rests on confidence. But depite the glass half-full attitude, there is no shortage of lender ambition for 2012.
Yet, all willingness to lend will come to nothing if the Eurozone delivers another funding drought and there’s no good way to spin that. Let’s just hope lenders deliver an A+ for effort in the meantime.
