The only thing we can do therefore is to put the Euro issues to one side and assume that things will remain much the way they are. In fact, if anything things are a little clearer now, especially as we have finally seen the much anticipated Mortgage Market Review and know that there is nothing really to fear there.

So whilst I agree that lending will be pretty similar to 2011 I think there are reasons to be optimistic, rather than continue to get weighed down by a dark cloud of disillusion. Whilst the doom mongers are still predicting the end of the world, especially where house prices and lending is concerned I disagree.

Mortgage costs will continue to rise slightly, whether or not the Euro issues are sorted, but for different reasons and whilst we may well slip back into a technical recession things do actually feel different to the first credit crunch. For one, lenders are still talking about lending, they still have plans to bring more products to the market and there is every sign that competition will increase, however slight it is.

Remortgage business will begin to return as borrowers get ever closer to increasing mortgage rates and a there is a massive amount of people coming off products and moving onto higher variable rates. Now that broker levels have dropped by a third, that is an awful lot of orphan clients to target. Buy To Let will continue to grow in strength.

Some lenders of course will try and fail yet again to up the amounts of business through their branch networks, especially now the FSA has rightly recognised that advice should be a cornerstone of any mortgage proposal.

In fact, Euro aside again, what is really worrying some in the City is actually the potential speed of an upturn. If the Euro does not go Kaput , if there is a feel good factor, if job losses are not as severe as thought and if the costs of QE do lead to higher inflation for longer and the global slowdown begins to turn toward the end of the year, what then?

I know that is a lot of ifs, but someone needs to think about these things. For those hard working brokers who have survived this long, the exceptionally dim light at the end of an extraordinarily long tunnel, could prove to be the brightest light for many a year.

What the FSA was hoping, was that this could be achieved with as little side-effects as possible, especially given the state of the housing market in general at present.

The good news is that this morning the FSA have every right to have a smile on their faces after producing a thorough, though no doubt provocative, piece of work which achieves a great deal of its original aim. What is most pleasing, is that there is evidence that the FSA have held a genuine consultation period, taken much in, listened and ignored where both was necessary.

Of course there will be those that say these rules have either gone too far or not gone far enough, but on the whole it would be perhaps a little unfair for us to sit here and pontificate on the “could have should have” debate.

In essence, the whole underlying premise can be broken down into three key words; affordability, advice and realism.

At its’ core are 3 main principles for “good mortgage underwriting” :-

1. Mortgages and loans should only be advanced where there is a reasonable expectation that the customer can repay without relying on uncertain future house price rises. Lenders should assess affordability;
2. This affordability assessment should allow for the possibility that interest rates might rise in future
3. Interest-only mortgages should be assessed on a repayment basis unless there is a believable strategy for repaying out of capital resources that does not rely on the assumption that house prices will rise.

Let’s face it, it is pretty hard to argue with any of those as a basic starting point. What is important however, is how they are interpreted and whether there are strict rules on each.

At first glance, and let’s be honest although I had an advanced copy I have not read all 438 pages, this is quite a balanced blend of prescriptive rules and general guidelines that leave some flexibility for both lenders and consumers.

The first key point is around income and affordability; and here it is prescriptive “Income will have to be verified in every mortgage application”.

This means an end to self-certification, which although this has disappeared anyway, the lid is being well and truly bolted shut to prevent a return. It also means potentially an end to fast-track lending, where whilst mortgage advisers needed to have evidence of income on their file ready to present to the lender at a moment’s notice, lenders only checked a sample.

Whether lenders will still find a way to do this now they are ultimately responsible remains to be seen, but I for one will not shed a tear for the end of fast-track in its entirety. All of this is sensible and will help to combat worrying levels of fraud.

Before you start to shout about the self-employed, for whom self-certification was initially designed for before it became so miss-used, again refreshingly the FSA have recognised this. There are no “prescriptive requirements for self-employed customers” and therefore lenders do retain a level of discretion over how they underwrite in this sector. As the report says, ” Our aim is to ensure that lenders take an informed lending risk based on the evidence – not disregard the risk altogether.”

Also, affordability will need to be calculated on a capital repayment basis, again something that many lenders do now anyway. Recognising that interest only is a “niche product”, which is suitable for some, gone are proposals to outlaw interest only mortgages altogether.

Instead “interest only mortgages can still be offered as long as borrowers have a credible plan to repay the capital, but relying on hopes of rising property values is not enough”.

So whilst lenders retain some discretion over how they calculate affordability, they must be robust and must also take into account possible future interest rate rises. In other words, if you can barely afford the mortgage at today’s historically low tracker rates, and / or on an interest only basis, well, you won’t qualify for a loan in the future.

This is of course entirely sensible and is something that any mortgage adviser worth their salt has been doing anyway for many years. Which leads on nicely to one of the other most important parts, advice.

The FSA have recognised that proper advice should be the cornerstone of any mortgage proposal and that there is a large degree of confusion from the general public over whether they are receiving advice or not. It has always seemed crazy that in this day and age, especially after the events of the last few years, a 1st Time Buyer with no experience can walk into a bank branch and obtain a 90% LTV mortgage with no advice!

Therefore the FSA propose to remove the non-advised sales process, “requiring all sales which involve spoken or other interactive dialogue with the consumer to be advised“.

This is a brave and necessary step taken by the FSA which not only levels the playing field between Mortgage Advisers and direct lenders, but will improve the prospects for all consumers taking out the largest loan they are likely to obtain in their life.

There are opt-outs for those to proceed on an execution only basis for professional or High-Net Worth consumers, although I have seen a good many mortgage advisers who need advice just as much as the next guy!

This means that a purely online basis where no conversation is had can proceed without any advice.

The FSA has also gone further in identifying vulnerable consumers, such as those consolidating debt, who will not be allowed to opt-out and must always take advice. This is stunningly simple common-sense and the FSA should be applauded for this.

In order to improve client understanding, there are simplifications to the Initial Disclosure Document, changes to Key Fact Illustration trigger points to avoid information overload and the requirement of “firms to give the consumer a plain and simple explanation of whether there are any limitations in the product range they provide.”

There has also been some recognition to those Mortgage Prisoners who can still prove they can afford the loan but need to move and may be in negative equity, for example. Lenders are given some discretion over these rules for existing customers with a good track record in order to keep the market somewhat liquid and allow for some much needed job transiency.

These “Transitional Arrangements” only come into play where there is no additional borrowing and the monthly payment will be the same or less than the existing payments.

Obviously the devil is always in the detail and I am sure there are other points of interest, especially where niche products such as Bridging loans are concerned, which will be highlighted in due course.

However, as the arguments begin until this consultation phase ends on March 30th 2012, it seems that whilst this may not be the ultimate panacea to please everyone, it is a sensible, practical and courageous offering which will do much to ensure the illness does not become an epidemic again, whilst it should also avoid critically harming the patient.

My first reaction was if that was the best idea he can come up with then we are all up the proverbial creek without a you know what. In reverting back to an oft tried and never achieved call for 30 year mortgages we suddenly saw that actually, no one in power at least, seems to really get the issues.

Alastair Darling said much the same thing in 2007 and was duly obliged by a couple of lenders offering 25 year fixes at the 6.39% level. Of course there was not much take up due to the onerous penalties in the first 10 years and the additional cost, but for those that did, well it’s looking a tad expensive now.

But still, Grant Shapps said to the Building Societies Association that “Longer-term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they are buying a home, by giving them greater certainty over how much they will be paying for their home in years to come.”

As with any advice, the problem is that for most real clients, a 30 year fix is probably not the best advice. Budgeting is all very well, but as those tied in to the previous offerings will no doubt tell you, it sometimes isn’t all it’s cracked up to be.

In today’s ever-changing times with a transient work-force, births, divorces and the like, some kind of flexibility is required and having a long-term fix with expensive tie-ins means that those who are looking to move are tied to the lender they took the product with. This may not be the best lender when they need to move or borrow more.

Mr Shapps also suggested that to get over the redemption penalty issue, lenders should cost them in to the interest rate. Ok in theory, but in practice this just makes the differential more expensive. Just a quick glance at 10 year fixes available at present, (and there are only 4 lenders I can see offering 7 such products), there is only one Skipton, who offers this at 85% LTV at a rate of 5.85%. Penalties are a massive 6% in the first 5 years.

The challenge for lenders, as always, would be to produce a cost-effective very long term fixed rate, with flexibility built in. Then you may see demand for such products rise, although not by a great deal.

So when you actually sit in front of a client and explain the pros and cons then go through the cost differentials, the majority, although not all, will opt for a cheaper and less onerous 5 year product.

My final question is what exactly, by calling for the introduction of such products, does Mr Shapps hope to actually achieve? It will not cure the issues we have in the property markets; it will not mean more homes are being built; it will not help a workforce that may need to move to where the jobs are and it most definitely help increase flexibility to deal with whatever life throws at you.

If anything it could stagnate the market further and mean that those who are on a tight budget end up paying more than they actually need to.

Whilst a healthy market undoubtedly needs a good mix of products to cater for every aspect of personal choice, there are surely more important matters to be concentrating on. Overhauling Stamp Duty, for example, would be a much better place to start.

First tried back in 1961 as an “experiment” whose results are still disputed, this involves the Fed selling short-term bonds and, here’s the twist, replacing them with longer term ones. The result is that as more long-term bonds are purchased interest rates should fall, (it’s a supply and demand thing, sort of).

So whilst the US relies on Chubby Checker to help lift them clear of another dip into recessionary squalor, the question is what affect will it have on us? The markets seem initially to be unconvinced, as whilst the yields of 10 year bonds will fall, recent studies suggest that last time the actual effect on mortgage rates and actual borrowing costs was negligible and, let’s face it, interest rates are already very low, so our problems run deeper.

The key to this policy is that no new money is put into the system, so it is crucially different to Quantitative Easing. If SWAP rates do fall accordingly as a reaction to this then great, but will this actually stimulate more lending to individuals and businesses?

Back at home the Bank of England’s MPC, now all firmly singing from the same hymn sheet, are contemplating a new round of QE themselves to help stimulate things, with November the favoured date for another £50 billion or so.

As far as the beleaguered UK housing market is concerned there are deeper issues still and we need some radical thinking and one or two experiments of our own.

Housing policy needs a radical overall, builders need to be supported, a North-South divide is getting more and more pronounced and the social issues that arise with a population unable to move are far reaching. Local Authorities are struggling to meet their social housing allocations and homelessness continues to grow, which is shameful in this day and age. Housing is in danger of being the preserve of the well off or the fortunate.

The strange thing about our industry, however, and one that is contradictory is that it feels better. Is that just because broker numbers have fallen so dramatically that there is more to go round? Most brokers I speak to say that things have picked up – is that just a London thing?

One pleasing aspect for us brokers is not just the fact that lenders are now tapping us on the shoulders and asking for more business but the return of the smaller building societies who, not able to just compete on price, are looking for new ways to lend again.

These lenders are able to eschew the frustrating tick box mentality of those banks who claim to offer the very best rates, (the reality being that clients are victims of the long, drawn out, “Yes, Yes, er No” approach), and instead offer the ability to discuss trickier cases with a real decision maker on day one.

If the property market is to kick forward once more, then this lending is essential in the new world where credit and risk rules the roost.

Whilst the threat to all of us is a second retreat by lenders triggered by, for example, a further disintegration in Europe or the mighty US twisting too far we all end up shouting, we need to make sure that as an industry we are heard louder than ever.

We need new ideas and some radical thinking to meet the challenges we face.

In truth the average consumer still feels like nothing has really changed, the technicalities of a recession are unimportant, it is how they feel and for most, things still feel tight.

However for all this talk I do get the feeling that most are taking a glass half full approach and despite the gloom the good old British spirit has kicked in. A cursory walk around the City outside our office and you can see the change. Offices are filling up, new tower buildings are being erected and bars are full in the evenings. There is an acceptance that we are where we are and we need to make the most of it.

The Mortgage market is no exception and we have been pleasantly surprised how the level of enquiries has held up over the traditional Summer lull, which quite frankly never really happened. In fact, seasonality seems to have all but disappeared, leaving a steady, though relatively flat, stream of business.

Undoubtedly this is a result of several major factors. Rates are incredibly low and all hyperbole aside, when you see fixed rates for 3 years below 3% and 5 years a smidgeon over it is hard not to react if you can. New tracker products are now lower than even the most competitive lenders’ variable rates so remortgaging is back in vogue.

The most pleasing aspect for us brokers is not just the fact that lenders are now tapping us on the shoulders and asking for more business but the return of the smaller building societies who, not able to just compete on price, are looking for new ways to lend again.

These lenders are able to eschew the frustrating tick box mentality of those banks who claim to offer the very best rates, (the reality being that clients are victims of the long, drawn out, “Yes, Yes, er No” approach), and instead offer the ability to discuss trickier cases with a real decision maker on day one.

If the property market is to kick forward once more, then this lending is essential in the new world where credit and risk rules the roost.

Of course there are still potential dangers ahead; although the reality is that in the short-term at least, inflation and potential interest rate rises are low down the list. With the US making clear that they do not expect to raise their rates until 2013 there is every likelihood, especially with weakening growth figures, that the UK will not see a rate rise until mid 2012.

So, whilst everyone knows that the next change in interest rates will be upwards, we could be seeing a further round of Quantitative Easing before we see a rate rise.

The threat is actually a second retreat by lenders triggered by, for example, a further disintegration in Europe or the mighty Bank of America seriously faltering and pushing up the cost of funds and stifling lending appetites.

I make no apologies therefore for suggesting that the next few months could well represent one of the best opportunities to purchase or remortgage. The remortgage benefits are obvious as rates are so low.

On the purchase side the lack of stock is obviously an issue, but whilst this is keeping values steady the gap between vendor aspirations and actual purchase prices seems to be easing. There are also more affordable rates at higher Loan to Values that will help first time buyers.

It will be interesting to see what the rest of this year holds, but I for one will continue to top up my half-full glass.

It’s enough to leave us all thinking that anything else is a little mundane, however it is far from it. If anything it tells us to make the most of everyday life, to worry only about the things we can control, to rejoice in the mundane and make it as fun and worthwhile as we possibly can.

One of those mundane things is the UK property market. It seems that this will be flat for a while, with only growing regional differences to write about as London continues to exist within its’ own bubble.

But we have to deal with what we are faced by and whilst it may seem tough, there are always positives. With funding rates at an all time low there is an opportunity for many to finally make that move or to remortgage to protect themselves against the future.
Being able to borrow at just 1.90% would have seemed laughable a few years ago, whilst being able to fix for 2 years at just 2.49%, 3 years at 3.15% or 5 years at 3.64% a mere pipe dream.

With the unpredictable nature of things we also need to ensure that we all do all we can to protect ourselves. With fixed rates at an all time low, those of us who are more sensitive to future rate rises can act to secure payments. Those that have put off taking out the essential protection policies to ensure financial security should life take a nasty turn, well now is a good time to look into it again.

It never ceases to amaze me how many leave themselves and their families open to potential hardship by refusing to find the extra few quid it would take to secure their futures. After all, this is cash that is probably spent in the pub, or over a nice meal each month without thinking. Many of us spend more a month on coffee, (he says staring at a Starbucks cup), than we do on insurances that could literally save our home.

Whatever else is happening in the world, UK lenders seem hungry again for action and we should all be making the most of this. After all, there is not much point in us all going Back To Black.

RIP Amy.

Of course there have been many detractors, the piss-takers and technologically inept who continue to see social media as a waste of time.

But with anything new and different, as Philosopher Arthur Schopenhauer said, “All truth passes through 3 stages : First it is ridiculed, Second it is violently opposed, Third, it is accepted as being self-evident …”

Those who do not embrace social media as a way of communicating to and learning from the very clients you aim to attract, risk being left behind in the future.

Not only has it helped us with our PR, but it has also given us some enquiries and a fully signed up introducer.

Leaving the B to C part aside for a moment, it is really the B to B side which I have really been blown away by. The number of times that people within the property industry as a whole, not just mortgage brokers, but lenders, solicitors, estate agents, journalists and property investors engage with comments you have made and before you know it you are part of a wider conversation with many interesting people you would maybe otherwise not have met.

It was during one such “conversation” that we picked up an Estate Agency introducer who has since passed us more than a dozen leads and during another, admittedly a very late night one, that the idea of the TweetMeet was developed by myself and Lea Karasavvas.

At its simplest, we just thought we had been conversing with many people we had never met and we should put that right over a few drinks. However, after a while it began to take on a deeper significance and the idea of trying to unify brokers, lenders, solicitors, surveyors and agents became a more far-reaching purpose.

After the pressures that our industry has faced over the past few years, and continues to face, it is important that everyone connected to the industry, from those at the coal face to those running businesses, come together to discuss these issues openly and honestly.

So far there seem to be around 100 people signed up and it would be great if there were many more. With the kind sponsorship of Tiuta to help things along I hope it will be an enjoyable event.

As with anything like this, there are some simple rules:-

1. The first rule of the TweetMeet is that you must talk about the tweetmeet!
2. Please make an effort to chat to everyone there, at the very least to introduce yourself, no cliques!
3. The event is Charterhouse Rules, so anything you say cannot be directly reported as having been said by you without your absolute agreement, which should help promote free discussion.
4. Enjoy, drink and network, but please no direct selling or poaching/recruiting on the night.
5. Feedback so we can improve the event for next time.

The event is totally informal, no long speeches or seminars, so feel free to wear what you like, relax and enjoy.

As my mate Lea Karasavvas stated: “This gives us an opportunity to remind each other we are all striving for economic recovery and that by working together, and not against each other, we can ensure it happens. It’s a chance for an industry brainstorm, done in a social environment, between influential business categories within the mortgage industry and will hopefully encourage extremely positive working relationships that will benefit us all.”

The event takes place in London on Thursday 23^rd June 2011 from 7pm at The Alchemist, 133 Houndsditch, London. The evening is planned to be an informal networking event, under Chatham House rules.

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.

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.