Positive outlook from lenders for coming year
January 12, 2008
As 2008 gets off to a financially turbulent start many lenders have expressed optimism for the coming year. According to the Intermediary Mortgage Lenders Association many of its members are remaining positive with regards to their outlook for the coming year, despite predictions that the credit squeeze is set to get worse and despite the already destructive effects of the credit crunch that swept across the UK in the summer of last year.
An official from the IMLA stated: “Lenders have a realistic but optimistic perspective on the market, which will be supported by good levels of remortgaging activity and a reaffirmation of prudent lending practices. They are noticeably more upbeat about their own firm’s volumes than they are about the market as a whole, pointing to the considerable opportunities that remain within such a large market. With credit quality moving up the agenda and key to the reopening of the structured finance markets, lenders are tightening their lending criteria with regard to both LTV ratios and financial assessment.”
The official also stated: “We believe the Bank of England has further potential to reduce borrowing costs and increase confidence. While Mr King and his colleagues must walk the tightrope between the risk of a slowing economy and the threat of rising inflationary pressures, we think the MPC can and should cut rates again, possibly as early as in January. This would clearly help boost market sentiment in 2008, which lenders believe is a key factor for the return of normality to the markets.”
The figures showed that other factors, such as healthy housing demand and good employment figures, have helped to increase optimism amongst many lenders.
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