It began with some positives from the previous week; UK growth was confirmed at 0.5% in the 3rd quarter of this year and the Government launched its much anticipated Housing Strategy, pulling together a range of announcements with a couple of new ones to try to stimulate growth and return some confidence back to the house building industry.

Whether you agree with the content of this or not, the point is that at last the Government is trying to do something to help stop a housing issue become a full blown crises. It looks like there are two main strands to the policy, which is firstly set out to bring back some confidence, (key word that), to the house builders. For the most part they seem quite pleased with it all and let’s face it, if builders are not building at all there is not much hope for much needed housing supply.

The more contentious issue is around the so called 95% LTV guarantee. I have had more than a few twitter banters this week around this with some commentators and journos suggesting that this is creating a false market, lending to people who otherwise would not be able to buy and putting the taxpayer on the hook when it all goes Pete Tong. I disagree.

The reality is that the taxpayer is the last resort; it assumes all these buyers will not be able to pay their mortgages, slip into negative equity and subsequently get repossessed. The claim that they will take out loans that are not affordable is plain wrong. In reality the loans will only go to people who in a “normal” market can afford the monthly payments of a 95% LTV mortgage but are struggling to raise the “abnormal” levels of deposits.

If they can afford the loan at say 3.5 or 4 times income, (my guess is that it may be more stringent than this anyway), so what if they slip into negative equity? We have to get out of the view that a house is a short-term investment. For most, here’s a novel idea, you could always just live in it – it is a home.

If people are then forced to move for whatever reason lenders should be big enough to underwrite the reason effectively and work out a sensible plan. If I have a 120% mortgage, have no issues with the payments and need to move to a similar property in another area keeping 120% LTV, fine. It is affordability that should govern everything – get that right, with a sensible degree of comfort then issues will be fewer.

Whilst the Euro turmoil is starting to turn into a full-scale endgame with the markets becoming more and more convinced of an EU zone break up of some description, we may yet need our tin hats and bayonets. However, as an industry we need to welcome every little move made to try to improve matters.

The news headlines are screaming from this morning papers that all is not well, traders are pictured with head-in-hands alongside graphs dropping off a cliff and Mr Peston is everywhere again – sounds like a preview of Credit Crunch 2 – Revenge of the Markets?

Looking back at the blog postings that were written during the heady days of the 1st crises there are many similarities. Back then the speculation went from bank to bank until the pressure became too much and one by one banks were rescued. There was then a brief lull, some began to believe we were out of the woods and then there was Lehman’s.

The question is are we now seeing the same in the Eurozone? Speculation has heaped enormous pressures on the “outlying” Euro countries and one by one they have been bailed out, but this cannot go on indefinitely. So which country will emerge as the Lehman’s’ of this crises?

The European Central Bank seems to be spinning round in ever decreasing circles, last month raising interest rates and this month buying bonds, or rather saying it is buying bonds, but rumours abound that they are not showing their faith in the crucial countries of Italy & Spain. As the interest rates of those nations bonds edge towards the 7% level, the need for a bailout of almost unfathomable proportions draws nearer.

As each country totters closer to the edge so the financial pressure intensifies on the big two, France and Germany, and it seems their citizens are not prepared to finance their European partners indefinitely.

What they are seeing are other nations accepting their dosh whilst the politicians struggle to push through the reforms needed to ease the pressure, through a combination of public backlash, political infighting and just plain incompetence.

The very future of the Euro is on a knife-edge and swaying in a Force 9 gale.

But there is perhaps a more serious issue from across the pond. The USA is struggling and is on the brink of dropping back into a recession that threatens to drag the rest of the world with it. Again, party politics is playing its part with a group of extremists known as the Tea Party wreaking havoc.

If the US proves to be the Lehman’s’ , well, things will get tough for a while!

You could say that all of this is the markets revenge. Revenge for not being allowed to run its natural course and wreak even more havoc, stemmed by bailouts, handouts and the printing of lots of money.

As the irrepressible Robert Peston writes in his blog, “The overall volume of indebtedness in the economy is … still with us – although it has been shuffled from financial sector to public sector. And if you took the view four years ago that the quantum of debt in the system was unsustainably large, then you would argue that by propping up the banks, the day of reckoning was being postponed, not cancelled.”

As an excellent Newsnight debate last night all agreed, “the problem is the politics”. They have to get involved, they have to do something, but their very actions have a resultant effect.

So whilst many fear a credit crunch emerging out of Southern Europe the issue is whether this spreads across the globe once more. Whether or not we dip into recession again is hardly the main issue as for the average person it feels like we have never come out of it, but if banks do start to clam up again, more so than now, it will hurt.

The big difference this time is that Libor rates have barely moved. This is a good sign, as a rise in Libor can be seen as a key indication that something is very wrong.

So whilst it is not time to panic just yet, it is time for politicians’ to stop the “politics” – a big ask I know.

Meanwhile property prices in the UK continue to strengthen according to today’s report by Halifax, with bricks and mortar looking to be a somewhat safe haven in the current storm. Although banking shares are being battered once more, UK lenders still seem keen to lend and whilst mortgage rates are at an all time low, well, you can draw your own conclusions.

Now, where’s that Gordon Brown when you need him?

Of course there are also the rants, usually from anonymous individuals who can’t spell, that don’t really help anyone, but sometimes there is a point that needs clarification, as now.

A couple of weeks ago I did something for BBC Online,  http://www.bbc.co.uk/news/business-12704172 where I answered various questions from those who wanted some mortgage assistance. It was a lot of work but enjoyable and good to do, especially as I feel passionate about the fact that too many people enter into a mortgage without taking proper advice.

A few days later I received the following from our website enquiry form :-

Enquiry_email: no.thanks@hah.com
Enquiry_regarding: Lies.
Subject: Saw you commenting on a BBC article, and was astonished at Question 6:

Why not simply state that houses are ridiculously overpriced at the moment, hence the requirement for decent deposits? Oh, thats because you have a vested interest in propping up the bubble. Good luck in the next few years.

Now of course everyone is entitled to their opinion, as am I by the way, so I thought I should answer the point directly. It is one that I have heard levelled at fellow commentators, that we have a vested interest in keeping property prices high. This is a very naive statement.

As a mortgage broker, the one thing we want above all is more transactions. High property prices do not generally help this. Brokers would much rather have a fluid property market, where houses are affordable and in plentiful supply.  A market where people are priced out of stepping onto the property ladder means that transactions fall, which is the opposite of what we want. The more transactions, the more advice we can give, the more mortgages we recommend, the busier we are and of course the more money we make.

To say brokers have an interest in keeping prices high is ludicrous.

One argument I have heard is high property prices mean brokers earn higher commissions. How? When property prices are high many first-time buyers are squeezed out, which means, as we are seeing especially in London now, that there are many cash buyers coming into the market, which means fewer mortgages, which mean less commission. In any case, many professional brokers work on a fee basis and the days of the commission only cowboys chasing the highest procuration fees are thankfully behind us.

There will of course be some who will probably lambast my argument, or state “where do they get these ‘experts’ from?”. Most usually on websites such as housepricecrash.com that seem to be a breeding ground for conspiracy theorists, unfairly hammering people just for putting out their views when asked – as witnessed by a shameful campaign against Ray Boulger a few months ago.

So for the record, I believe my views are as valid as everyone else’s, especially as I am a fully qualified advisor who still sees clients as part of my day job rather than just a spokesperson. I would like to see a sensibly priced housing market, one that is robust and avoids the booms and busts of previous cycles. I want to see a high level of transactions and ensure that everyone who takes out the biggest loan they are ever likely to has access to full independent advice, in fact I believe it should be mandatory.

I do not however, believe that property is ludicrously overpriced at the moment, especially in certain areas. Supply and demand is the one economic theory that I believe always holds true and, at present, supply of decent property is at a premium.

The main issue is not brokers, or even estate agents who will probably tell you the same thing, but with vendors themselves. They still believe that their property is worth higher prices and refuse to consider lower offers. Thus there is a gap between buyers and vendors that is not being closed.

Even with this, I believe that anyone buying the right property now will look back in 5 or 10 years time and see that they bought well.

There will be many who disagree with me and healthy debate should be encouraged, but let’s keep the arguments constructive rather than personal.

Anyway, keep the comments coming, positive or negative I am happy to be challenged and I have never said that I am absolutely right all the time. What I do say, is that my views are honest and honed from my own experiences talking to clients, lenders and estate agents.

Have faith, the majority in the property industry passionately believe in what they are doing – ultimately helping the consumer.

Whilst Cameron & Clegg large it up in Davos, (nice Swiss Ski Resort), meeting top bankers and world leaders to discuss growth, lending and bonuses  at the World Economic Forum, the latest GDP figures on the UK’s economic growth are released tomorrow followed by Bank of England Governor Mervyn Kings’ first speech of the year.

In the meantime there is a new Shadow Chancellor waiting in the wings keener to attack than Karen Brady smiling smugly at Football “pundits” Keys and Gray with that “I told you so” look on her face.

No doubt events in Davos are important but the real analysis will be on dissecting Mr King’s speech for clues on when he thinks interest rates may have to rise to combat the growing effects of inflation, or if the economic recovery is weakening to such a degree that such a change can be put off. The GDP figures will be especially interesting here.

The markets seem to have decided already that a rise is due pricing in, according to one of my city clients, a 0.75% rise this year.

Mr King will probably stick to his guns in the short-term at least about these inflationary pressures being temporary and about to rise further due to the VAT rise. Once the rate hits 4% however, the pressure could be intolerable and the markets could begin to make their own decisions deciding that the Bank of England no longer has the authority.

“Squeaky bum time” indeed, as one economist put it last week. Over to you Mr King…

For those in the property market however, the message could be interpreted that investing in property now, before rates rise, represents a good opportunity.

In very simple terms, keeping cash in a bank account whilst rates are so low and inflation is higher means that actually you are earning diddly squat, or very close to it, so putting this money into property may be a preferred option if you believe House Prices will not fall dramatically.

In areas like London and the surrounds a shortage of stock is helping to keep house prices stable and even if more properties do hit the market, these “high demand” areas look unlikely to waiver.

Coupled with historically low borrowing rates for mortgage finance, variable tracker rates from 1.99% and 2 year fixes from 2.65%, it really could prove to be one of the best times to buy in many a year.

The discussion was of course the much publicised Mortgage Market Review, (MMR) which in many people’s eyes threatens to derail any hope of recovery in the housing market and has certainly at least got Mr Shapps all fired up and even the Prime Minister himself concerned about the economic effects of the proposed regulation.

In theory, it is hard to argue with the FSA that they do mean well and want to try to ensure that we do not have a repeat performance of the past few years, but this does seem to be a classic example of locking the stable doors after the horse has bolted.

In actual fact, there is a saying that regulation should be tightened in boom times and relaxed in tough times, which is what should have happened, making the whole thing “counter-cyclical” as Andrew Verity called it this morning.

However, we are where we are and whilst some of the measures may mean well Mr Shapps is right to be concerned about the consequences.

Rightly or wrongly the housing market is important to the economy as a whole and if we cut out whole swathes of borrowers from the market now lending levels will stay low, repossessions will rise and house prices could fall dramatically.

It may seem rich to say now, but lenders have been quick at self-regulating, cutting out self-certification, high LTV lending and pricing for risk. Whilst no-one wants a return to the days when you just needed a passport and a smile to get a loan, there is not much to be gained now from, as Mr Shapps said, “micro-managing what should be a naturally competitive market”.

Limiting someone to borrowing 30% of their net income, as an example, may sound nice in theory but in practice raises many questions, not least the question what is someone’s income?

Not everyone is straightforward, should someone with children and committed expenses be able to borrow the same as a single person with no dependents and no debts? One size does not fit all.

Affordability is key and lenders now have robust affordability calculations that must surely be more relevant than simply saying you can only borrow 3 times your income.

Also, when owning a house peoples lifestyles change, it is part of growing up. The FSA seem to be assuming that people behave in the same way with and without a mortgage. Most clients I see are all realistic that their monthly “entertainment” expenses or savings will change once they have a mortgage.

Is it also really worth banning self-cert when no lenders offer this product? Or ending interest-only loans when this is a legitimate repayment method for many people. The CML do not believe interest only is detrimental to the market and neither do I. The key is around the advice process.

The focus needs to be on making sure every customer gets proper advice and fully understands the costs and responsibility in taking a mortgage, and how rates can change. Today a First Time Buyer with no experience can still borrow vast amounts of money direct from a lender with no advice and this is what needs to change.

So what do we think can be gained by today’s meeting?

Well we don’t really know if this is just political posturing or if the Governments views will fall on deaf ears, but the FSA wanted feedback from all areas and the Government of the day have every right to raise their concerns.

Whilst I do not expect critics of the MMR to be cheering as Mr Shapps waves a white paper declaring peace in our time, discussions between the two parties should have started ages ago and should be regular.

The best outcome is a sensible partnership between government, regulator, lender and broker working together to ensure customers are given all the information and tools to be able to make their own choices in acting responsibly.

In other words making sure that every person obtains the proper advice they need.

This is of course good news for mortgage brokers and borrowers alike, after all more choice and more competition is what is badly needed.

The issues for many is whether they should fix now or enjoy a low variable rate tracker.

There has been so much contradictory economic data and press speculation in recent months, culminating in recent data showing that the UK economy grew more than expected in the last quarter, leading to renewed claims that interest rates may rise quicker than many first expected.

On the other hand this has been dampened by reports of a predicted fall in economic activity and house prices as the recent Government cuts start to bite. Even on the Bank of England’s’ Monetary Policy Committee itself we have two individuals at either extreme, one calling for immediate interest rate rises and the other for an increase in the Quantitative Easing campaign.

Trying to predict when rates will move is a dangerous game and for many now is the time to sensibly review their options and levels of affordability should rates increase by 1% or even 2% in the next year or so.

Throw in the fact that fixed rates have come down to very attractive levels, house prices are expected to ease further, (meaning that those looking to remortgage may fall into a more expensive interest rate band), and lenders have tightened their loan criteria, it could be that the time to take action is now.

After all, there are now some excellent choices whatever your individual views on interest rates are; trackers under 2%, five year fixes below 3.7% and products that allow you to enjoy a low tracker now and switch to a fix without penalty at any time. All with free valuation and legal’s for remortgages.

Don’t get me wrong this is all great, and will help many especially around areas like London, but the reality is it is still representative of the mainstream lenders battling it out in the low-loan-to-value arena, around 70% and below. In order to really help around the country as a whole however, there has to be more innovation in the higher LTV bracket, nothing stupid, just up to 90% LTV.

In other words helping those most at risk to rising rates from becoming mortgage prisoners.

It is a positive start, but there is much more to be done.

Granted there are alot of questions that remain unanswered and were meant to provoke some debate but anyway, here you go…

As perhaps the least auspicious member of the panel, being a mere mortgage broker rather than an economist or an eminant journalist, I can say with absolute confidence that no-one really knows what will happen next. The old adage that if you ask 10 different economists the same question you get 11 different answers has never been truer.

In reality there are just too many unknowns at present to predict with any real certainty other than good old fashioned gut instinct.

Will the Government cuts severely hold back any recovery or are they made out to be worse than they actually will be?

Have most people in the private sector at least decided that if they have not lost their jobs by now they should be fine?

Will the Monetary Policy Committee continue to ignore the sticky inflation issue for the good of the economy and keep interest rates lower for longer? Or will they bow to the pressure of fellow MPC member Andrew Sentance when he says that the MPC are risking “a loss of confidence and credibility” in dealing with the inflation issue and increase rates faster than many believed?

What will be the real effects of the hitherto untried policy of Quantitative Easing? Will this lead to higher inflation once the recovery really kicks in leading to ever higher interest rates?

Will the fact that banks need to start repaying back government aid lead to a further mortgage shortage which will drag house prices down further? Will this in turn cut off further funds for small businesses who will lead the recovery?

Or have the banks really just been “profiteering” recently and are now back in the best condition they have been in for many a year, ready to lend more at these profitable levels of interest no matter what they may say about Capital Adequacy requirements?

Whilst I do not pretend to have the answers, and whilst many economic theories have been thrown away over the past three years, I did learn 3 things in my remedial economics classes that I believe hold true and keep me positive.

1.    Supply and Demand – as far as property in the UK is concerned, with finite space and a lack of houses together with a nation obsessed with property, prices are set to recover.

2.    Everything moves in cycles – no matter how far the fall, there is always a recovery which in my mind has always been due at the beginning of 2012 and I see no reason for this to change. If this is the case it would seem that the next  “winners” in business or investment will be doing many of their deals in the coming months on the way up.

3.    Confidence is king – there is always a danger of talking ourselves into a double-dip as many in the US and in the media in the UK have been trying to do.  Whilst not appearing naive I do believe that we need to continue to keep positive.

Whilst the next 6 months may look grim, it is important for us to keep working hard, and I do believe we have passed through the hurricane and are experiencing the last of the storms.

Just 47,643 loans were approved for house purchases and a mere 29,949 loans for remortgages meaning that both sets of figures have now dropped below their previous 6 months average.

First-time buyers have every right to feel discriminated against, as while mortgage lending has become more profitable for many lenders, it is too often targeted at those customers who are already well catered for. Lenders are continuing to walk the easy path.

Much more needs to be done by lenders in order to revitalise the mortgage market. While new entrants such as Metro Bank are welcome, more competition and innovation is required to meet current levels of demand, which are almost certainly higher than the banking world would have us believe.

Meanwhile Nationwide’s latest House Price analysis shows that prices fell by 0.5% in July, with the annual rate of house price inflation slipping to 6.6%.

With more properties coming on to the market and difficulties in obtaining mortgage finance still evident to many, it seems that this is likely to be the trend for the rest of the year.  Whilst certain areas will hold their value better than others, especially within the more sought after areas of London where the supply of good quality stock is still light, the recent spurt in house prices is unlikely to be repeated again this year.

The good news for those who are able to access the highly competitive mortgage products now on offer is that the second half of this year could well be an excellent time to purchase.