UK Mortgage Market Outlook: Q3 2009

UK Mortgage Market Outlook: Q3 2009 published by Datamonitor in December, 2009. This report consists of 24 pages and the price starts from US $ 2795.

Introduction

Abstract

Introduction

The UK is still officially in recession, the deepest downturn in decades. The resulting fall in consumer demand for mortgages has combined with a severe restriction in the availability of credit to cause a massive downturn in gross lending in 2009. This brief offers detailed analysis of the market and how it is expected to develop over the next few years.

Scope of this research

• Provides an evaluation of the market and industry trends up to Q3 2008.
• Examines the impact of factors such as the base rate, arrears and repossessions and the pre-budget report on the market.
• Sets out Datamonitor' s forecasts for gross lending covering the period 2010-2013 under three different scenarios.

Research and analysis highlights

UK gross lending fell to £39 billion in Q3 2009, a 36% decline on the same period in 2008.

Remortgaging has been stagnant throughout 2009, and will only recover once the base rate starts to rise.

The supply of mortgage credit, critical to the effective functioning of the market, is slowly starting to increase, following a prolonged period of contraction.

Key reasons to purchase this research

• Understand what issues have driven market performance in Q3 2008.
• View details of Datamonitor' s forecasts for the period up to 2013 to help plan your future strategies.
• Review the impact of proposed FSA regulations affecting the mortgage market.

Table of Contents

DATAMONITOR VIEW

• CATALYST
• SUMMARY

ANALYSIS

• Gross lending in Q3 2009 was well down on the same period in 2008, itself a quiet year
  • UK gross lending fell by 36% in Q3 2009 to £39 billion, compared to Q3 2008
  • Gross lending for the whole of 2009 is forecast to be 61% lower than the total for 2007
  • Monthly gross advances have remained at a steady level for the duration of 2009
  • The market for remortgaging continues to be affected by the low base rate
  • House prices have staged a recovery in the second half of 2009
  • Arrears and repossessions continue to rise more slowly than anticipated
  • The supply of mortgage credit remains under pressure, but is starting to ease
  • The PBR points the way to widespread spending cuts in 2011 and beyond

• Gross lending is likely to stage a steady rather than spectacular recovery over the next few years
  • The wider economic situation provides both hope and concern for the mortgage market in 2010 and beyond
  • Datamonitor predicts that gross lending in the UK will rise to £235 billion in 2013
  • Datamonitor has produced two alternative forecasts in recognition of the contradictory factors at work in the market

• A number of external developments will have direct consequences for the mortgage market
  • The Financial Services Authority sets out its Mortgage Market Review
  • The last lenders offering self-certification mortgages have pulled out of the market

APPENDIX

• Supplementary data
• Definitions
  • Bank of England base rate
  • CAGR
  • Gross advances
  • Remortgaging
  • RMBS
  • Self-certification mortgage

• Methodology
• Forecasting methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Forecast gross advances under the Datamonitor view, 2009 - 2013
• Table: Forecast gross advances under the optimistic view, 2009 - 2013
• Table: Forecast gross advances under the pessimistic view, 2009 - 2013
• Table: UK gross mortgage lending in third quarter, 2005 - 2009
• Table: UK annual gross mortgage approvals, 2003 - 2009
• Table: UK gross monthly approvals, 2006 - 2009
• Table: Monthly and annual changes in UK house prices, 2007 - 2009
• Table: UK gross approvals by type, 2007 - 2009
• Table: Quarterly changes in secured credit availability and credit scoring criteria, 2007 - 2009

FIGURES

• Figure: Gross lending in Q3 2009 was very subdued compared to the same period in recent years
• Figure: Annual gross lending figures highlight the scale of the decline since 2007
• Figure: Monthly gross advances bottomed out in November 2008 and has held steady ever since
• Figure: Approvals for remortgages have stagnated in 2009, but have partially recovered for purchases
• Figure: House prices have been rising since the spring
• Figure: Mortgage credit availability has continued to tighten
• Figure: In the view of Datamonitor, gross lending will rise to £247 billion in 2013
• Figure: In the optimistic scenario, gross lending will reach £307 billion in 2013
• Figure: The pessimistic forecast sees gross lending stagnating in 2010 and 2011

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