Frank Eve is managing director of Frank Eve Consulting
“Events my dear boy, events,” replied Harold Macmillan, our prime minister between 1957 and 1963, when questioned by a journalist about what was most likely to blow a government off course; and this famous quote applies today in the UK mortgage market.
Current mortgage market dynamics are shaped by politics; the thoughts and behaviours of politicians have more influence than ever before on our industry.
A point clearly demonstrated this week with Nick Clegg the deputy prime minister calling for the Funding for Lending scheme to be ‘put on steroids’.
The scheme is the most important initiative that the Government has come up with for the mortgage market.
Keeping rates low is the only way that we will see stable house prices and produce any volume growth for the industry.
If Funding for Lending was extended into 2015 and encompassed the specialist lender sector as well as the large banks and building societies, we could see a recovery in the industry rather quicker than many would expect.
The mortgage broker could then be in line to make a big comeback both in terms of business volume and market influence.
The problem is that some politicians want to see the scheme directed at small business and first time buyers rather than the, low risk, low loan to value business, where the funding is focused at present.
How the scheme is re-shaped by our political system over the next few weeks will be the crucial factor for the mortgage market going forward but what could possibly blow this off course? ‘Events my dear boy, events’.