Interest rate hikes are top intermediary issue for 2007

As the Monetary policy Committee meets today (11th January) to discuss its Base Rate, new research by GE Money Home Lending finds that the potential of future interest rate increases is the key issue for UK mortgage brokers in 2007.

The research, amongst 100 mortgage brokers, credit brokers and packagers, indicates that the market in 2007 offers great opportunities and challenges for both themselves and for UK consumers.

A wide variety of issues affected the market in 2006 with the average intermediary claiming to have been impacted by at least 5 key issues through the year.

Buy to let emerged as a key growth story in the market along with the rise in self certified mortgages and the implementation of new technologies. Areas of concern included the potential of Base Rate rises as well as the increased criticism of interest only mortgages.

Buy to Let again looks set to be a key growth area throughout 2007 with three quarters of intermediaries indicating that this will be an opportunity for them (75%). The uncertainty over Bank Of England Base Rates has emerged as the main concern for mortgage intermediaries with almost 9 out of 10 claiming this to be the key issue for them in 2007. Interestingly, technology has increased in prominence on 2006 with over two thirds claiming this will play a part in their business in 2007.

Gerry Bell, Head of Mortgage Marketing at GE Money Home Lending, said “As a leading provider in the specialist mortgage market we are always interested in the issues that effect our partners and their customers. Once again the potential for increases in the Bank of England Base Rate is a key concern for many mortgage intermediaries over the coming year, with technology and buy to let seen as the possible drivers of growth. It is important that lenders ensure they are offering intermediaries products that help them drive growth, as well as providing quality products and peace of mind for consumers.

“Our research has shown that whilst the market continues to offer great potential and growth in areas such as Buy to Let, it also offers challenges for consumers and intermediaries alike. Mortgage providers need to continue to provide their intermediaries with attractive products and technology to help facilitate future growth whilst trying to meet the needs of consumers with new product development and innovation.”