The announcement was part of AMI’s quarterly economic statement focusing on the UK economy, housing and mortgage markets issued today.
The statement observed that the economy appeared to jump out of recession, improve its balance of trade and employment and unemployment and keep a handle on inflation all of which should improve consumer confidence.
However fears over job security and the lack of pay rises still lingered as real concerns.
Robert Sinclair, chief executive of AMI, said: “The global economy has weakened this year with large economies struggling to grow. The International Monetary Fund warned the risks of recession in advanced economies remained high. While the US should manage some growth in 2013 the crisis in the Eurozone has not yet abated.
“The UK is exposed to this global weakness and the lack of growth may mean the government will miss its debt targets due to the sluggish economy. Trade will be a key element to returning the UK to sustainable growth with Brazil, Russia, India and China offering the best opportunities.”
Sinclair said that house prices were back to the levels last seen 10 years ago but London and the South East continued to defy the national trend. But the improvement in affordability, however, had not led to greater accessibility of mortgages which left first-time buyers still frozen out of the market.
He added: “As the credit market is not likely to ease in the near future house prices are likely to continue to fall in real terms. The mortgage market is a little stronger. We expect to see gross lending pick up a little in 2013, possibly reaching £145 billion, with a larger proportion through brokers than of late thanks to the Financial Services Authority rules on advice and New Buy schemes.
“Most new build sales are via brokers because the developers require borrowers who have been properly vetted for affordability and see intermediaries as efficiently managing that process.”
