Vic Jannels, AToM Group

The general consensus is that house prices will soften during 2005 and that this may benefit the first-time buyer. If this is the case, it will be good news for the market as it will stimulate housing chains, moving properties more quickly which sounds like catch-22 in reverse.

The big challenges are going to be in the network arena where no one really knows the true appointed representative (AR) numbers yet and where some providers may well be staring financial difficulties full in the face quite early in the year.

Lenders will need to look carefully at who they want their business partners to be and it is likely that there will be new entrants causing more traditional players to stay on their toes to avoid loss of market share. The out and out winners should be borrowers as rates become keener due to lenders cutting margins to protect distribution. Interest rates should stay low – after all an election is on the horizon.

Claire Kennedy, BDS Mortgage Group

As an industry we still face the challenges that Financial Services Authority (FSA) regulation has presented and no doubt the reviews being undertaken will unearth much to contend with across the board. It is hoped that the end will justify the means and we will reap the fruits of our labour in 2005.

As a packager, our main challenge is to continue to provide a valued service that brokers need in the face of much competition. This means maintaining a tempting lender panel, a wide and varied range of exclusive products and an exceptional level of service and business support – better than that offered directly by lenders. We face the challenge of being written out of the history books by the sceptics who say we do not have a place in the ‘brave new world’. However, if we, and others like us, continue to offer original and exciting propositions to the market, we are confident that we will maintain our position of influence and remain successful in 2005 and beyond.

Jeff Scott, Abbey for Intermediaries

Innovating on service rather than products is likely to be the focus in 2005. Regulation has brought with it a number of practical constraints, which has forced a degree of simplicity into mortgage product structures and procuration fees. Most of this is good news, but communicating with customers about the products will remain a challenge. With three rates equally prominent in all advertising to consumers it feels more cumbersome.

Key facts illustrations (KFI) lie at the heart of regulation, being designed for transparency and openness with their penny perfect accuracy. The principle is absolutely right, but the practical implementation will take some time for everyone to get used to. Of course, it may also be some time before we get feedback from borrowers on the difference regulation will make to them. In 2005 we need to spend time as an industry getting this right, for the benefit of the borrower, rather than simply to comply with regulation.

Bill Cargill, Dunfermline Building Society

Looking at this from a Scottish perspective, many of the coming years challenges will be common to all lenders, while some will be more closely aligned to our particular business.

The full effects of mortgage regulation will impact during 2005 as will the additional demands of general insurance regulation. While the latter should not have as great an effect, it will add another layer of paperwork and may well elongate the whole mortgage process. In addition to this, competition in the marketplace, both for borrowers and for regulated staff, will become more demanding.

I would expect the buy-to-let market to thrive, especially in cities with universities, where far-sighted parents will buy property while their offspring attend university. This market will also be driven by those who believe that their pension scheme will gain more through property investment than through other forms of saving.

Between now and then of course, we have Christmas – and who knows what Santa might bring for the financial services market?

Dominic Toller, Bristol and West

I think that the coming year will see a renewed focus on the prime market, with some excellent standard deals making an appearance. There are two main reasons for this. First, once Mortgage Day is put firmly behind us, lenders will re-engage with their core market. Second, we predict a period of relative stability for base rate levels that will allow a focus on prime product design.

Buy-to-let lending will continue to be strong, as stable interest rates and a relatively soft landing for house prices lead to greater yields for landlords. Rate stability will also encourage more first-time buyer activity and this will encourage lenders to become more innovative in first-time buyer product design.

Finally, it is likely that we will see more mortgage intermediaries becoming ARs, swinging the balance between ARs and directly authorised intermediaries back towards a 50/50 split.

Ray Boulger, Charcol

The big challenge for 2005 will be to win back consumer confidence. After targeting house price inflation in the middle of this year the Monetary Policy Committee’s strategy has paid off. The steady base rate increases have had a debilitating affect on the housing market, with prices softening since the middle of the year. As more people recognise that the next move in Bank base rate is likely to be down, confidence in housing will return as the more astute buyers are enticed back.

After spending 2004 preparing for Mortgage Day the mortgage industry can now allocate more time to innovation, particularly to help first-time buyers. We expect this challenge to meet with some success, as will the challenge for more innovation in lifetime mortgages. Finally, a priority for many lenders is to significantly reduce the length of their KFIs. The FSA threat to dictate further on KFI content if necessary is a strong incentive to do this quickly.