UK Mortgage Market Outlook: Q3 2008

Publication Date	December 2008
Publisher	Datamonitor
Product Type	Report
Pages	23
ISBN Number	not applicable
Product Code	DAT14670

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Summary

The UK mortgage market has experienced massive changes in 2008. The credit crunch is causing havoc within the market and with the economic picture looking gloomy, this industry will remain weak throughout 2009. This brief offers detailed analysis of the market and how it is expected to develop in the upcoming years.

Scope

Provides an evaluation of the market size and industry trends up to Q3 2008.
Provides Datamonitor's forecasts for each mortgage product line up to 2012 under three different scenarios.
Provides a detailed summary of recent developments within the market including government intervention and regulatory changes.

Highlights

Mortgage lenders advanced a total of 61.8 billion in gross lending in Q3 2008, representing a massive 37.4% fall from 2007 levels.

Of the three product lines, remortgaging appears to be the most resilient to the credit crunch. The average quarterly gross lending for remortgaging in the first three quarters of 2008 amounted to 32.0 billion, slightly lower than the quarterly average of 32.3 billion recorded in 2008.

Getting first time buyers back onto the property market is very important for the housing industry, consequently some key advances are taking place to entice them back into the market.

Reasons to Purchase

Review market performance in Q3 2008 to place your performance in context to the market's.
View the latest independent forecasts for each segment of the mortgage market to plan your strategy with confidence.
Understand the key regulatory and government backed schemes that will impact upon your business in the future.

Content

DATAMONITOR VIEW
CATALYST
SUMMARY
ANALYSIS
- Gross mortgage lending in Q3 2008 was extremely low
- The UK mortgage market reached a low of 61.8 billion in gross lending in Q3 2008
- Mortgage lending has been erratic in 2008
- All three product lines within the mortgage market performed poorly in Q3 2008
- Remortgaging overtook loans for house purchase as the biggest product line within the mortgage market
- First time buyers continue to struggle despite falling house prices
- Latest 2008 secured lending approval data highlights that the mortgage market will remain weak in 2009
- Gross mortgage lending in 2009 will be lower than in 2008
- The UK mortgage market has turned a corner in 2008 and the declining trend will continue in 2009
- House prices continue to slump
- Datamonitor predicts that the UK mortgage market will contract to 237.7 billion in 2009
- Given the unpredictability of the UK mortgage market, Datamonitor has analyzed two additional scenarios
- The pessimistic scenario assumes a more severe house price crash
- The optimistic scenario assumes a fall in house prices to a lesser degree than the pessimistic view
- The mortgage industry is experiencing significant changes
- Exits within the mortgage market have been mostly within the specialist sectors such as sub-prime
- The FSA is reviewing repossession practices and is cracking down on mortgage fraud
- A number of non-FSA regulatory initiatives are taking place
- The government is adopting a hands on approach to revitalize the mortgage market
- Many measures are being put in place to help first time buyers
- The Crosby report recommends three major actions to improve liquidity in the mortgage market
APPENDIX
- Supplementary data
- Definitions
- CAGR
- Gross advances
- Loan-to-value (LTV)
- Non-standard
- Secured loan
- Methodology
- Forecasting methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List of Tables
- Table 1: Forecasted gross advances under the Datamonitor view, 2007-12f
- Table 2: Forecasted gross advances under the pessimistic view, 2007-12f
- Table 3: Forecasted gross advances under the optimistic view, 2007-12f
- Table 4: UK gross mortgage lending in the third quarter, 2004-08
- Table 5: UK monthly gross lending, Jan-Oct 2008
- Table 6: UK gross mortgage lending by product line, Q1 2007-Q3 2008
- Table 7: Monthly value and volume of all secured loans approved in the UK, Jan 2007-Oct 2008
- Table 8: Monthly house price change in the UK, January 2007-November 2008
- Table 9: Forecasted macroeconomic variables used for the Datamonitor view, 2007-12f
- Table 10: Forecasted share of the mortgage market under the Datamonitor view, 2007-12f
- Table 11: Forecasted macroeconomic variables used for the pessimistic scenario, 2007-2012f
- Table 12: Forecasted share of the mortgage market under the pessimistic view, 2007-12f
- Table 13: Forecasted macroeconomic variables used for the pessimistic scenario, 2007-12f
- Table 14: Forecasted share of the market under the optimistic view, 2007-12f
List of Figures
- Figure 1: Gross mortgage lending in Q3 2008 was the lowest seen in the last five years
- Figure 2: Monthly gross lending has been erratic over 2008
- Figure 3: Gross lending for all three product lines fell further in Q3 2008
- Figure 4: Both the value and volume of secured loans approved have been falling rapidly over the past 18 months
- Figure 5: Since late 2007, house prices have been falling
- Figure 6: Under the Datamonitor view, gross advances in the UK mortgage market will decline further in 2009, 2007-12f
- Figure 7: Under the pessimistic scenario, gross lending in the UK will reach a low of 222.2 billion in 2010 before picking up again in 2011, 2007-12f
- Figure 8: Under the optimistic scenario, gross advances in the mortgage market will reach 303.0 billion by 2012, 2007-12f