The Association of Mortgage Intermediaries (AMI) has published its latest Quarterly Economic Bulletin which focusses on the UK economy, housing and mortgage market.
The broker trade body believes that with the economy coming out of recession, the (previously) positive news on inflation, improvements in the balance of trade and both employment and unemployment, consumer confidence should improve, although there appears to still be real fears based upon job security and the lack of pay awards.
“The global economy has weakened this year, with large economies struggling to grow,” said Robert Sinclair (pictured), chief executive of AMI.
“The IMF warns the risks of recession in advanced economies remains high. While the US should manage some growth in 2013 the crisis in the Eurozone has not yet abated. The UK is exposed to this global weakness and the lack of growth may mean the government will miss its debt targets due to the sluggish economy. Trade will be a key element to returning the UK to sustainable growth with BRICS countries offering the best opportunities.
“House prices are back to the levels last seen 10 years ago, but London and the South East defy the national trend. The improvement in affordability, however, has not led to greater accessibility of mortgages which leaves first-time buyers still frozen out of the market. As the credit market is not likely to ease in the near future, house prices are likely to continue to fall in real terms.”
Sinclair added: “The mortgage market is a little stronger. We expect to see gross lending pick up a little in 2013, possibly reaching £145 billion, with a larger proportion through brokers than of late thanks to the FSA rules on advice and New Buy schemes. Most new build sales are via brokers because the developers require borrowers who have been properly vetted for affordability, and see intermediaries as efficiently managing that process.”