At the same time chief executives acknowledge the coming year will present challenges, including pressure on margins from unprecedentedly low interest rates.
The Building Societies Association’s annual chief executive opinion survey reveals that bosses of mutuals expect recent gains in house prices to be retained in 2010, with an average prediction of a 1% rise over the year. They expect the Bank of England’s official interest rate to remain low, (with an average forecast of 0.83% at the end of 2010), which could continue to restrict mortgage funding, although will help those with mortgage repayment difficulties.
Chief executives also believe that the FSA’s Mortgage Market Review could have a negative bearing – through increased costs and potentially cutting out a large section of self-employed borrowers.
Adrian Coles, director-general of the BSA, commented: “Compared to the hectic events of over a year ago, chief executives can now plan for the future, notwithstanding the continuing challenging conditions. Mutuals continue to examine how they can cut costs, without compromising on member service.
“What mutuals really need from any new Government is a guarantee of a level playing field on capital, liquidity and funding. Mutuals should be able to compete fairly with those institutions that required direct taxpayer support in recent years.”
