14 Dec

Lenders optimistic about 2008

Lenders optimistic about 2008

Intermediary lenders have issued a positive outlook for the property market in 2008, despite predictions of the impact of turmoil in the financial markets.

Of the lenders surveyed by the Intermediary Mortgage Lenders Association (IMLA), some two-thirds said they think remortgaging will stay strong in 2008, with levels either increasing or staying at their current level.

Peter Williams, executive director of the IMLA, said: "Lenders have a realistic but optimistic perspective on the market, which will be supported by good levels of remortgaging activity and a reaffirmation of prudent lending practices.

"With credit quality moving up the agenda and key to the reopening of the structured finance markets, lenders are tightening their lending criteria with regard to both LTV ratios and financial assessment," he added.

Nonetheless, the survey also revealed that lenders are seeking further rate cuts, in addition to this month's quarter per cent reduction, in order to restore confidence to the UK property sector.

Mr Williams explained: "We believe the Bank of England has further potential to reduce borrowing costs and increase confidence. While Mr King and his colleagues must walk the tightrope between the risk of a slowing economy and the threat of rising inflationary pressures, we think the MPC can and should cut rates again, possibly as early as in January."
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