It consulted a panel of experts for their predictions on some of key personal finance topics for the forthcoming 12 months and 70 per cent believed more lenders would get involved in this sector of the mortgage market.
There was also unanimity in forecasting a Base Rate rise, with 80 per cent of the panel believing a rise in the first quarter of 2007 would happen.
Predictions for Base Rate
The two base rate increases during the latter part of 2006 seem to have had little impact so far either on reducing inflationary pressures or on dampening house prices. It was not surprising therefore that 100 per cent of our panel predict a further rate rise in 2007, with 80 per cent anticipating this will occur during the first quarter. And at the end of 2007, 20 per cent expect Bank Base Rate to be 5 per cent, 60 per cent = 5.25 per cent and 20 per cent = 5.5 per cent.
With incomes already stretched and rising debt burdens exacerbated by increased utility costs and the delayed impact of Christmas spending on credit cards, a rate rise early in the new year could be the tipping point for many.
Consumers on a tight budget should take a look at their financial position and perhaps choose products that offer some protection against rate increases.
Mortgages
2006 has been a year of innovation in the mortgage market, with many providers moving into specialist lending areas. Several mainstream lenders have dipped their toes into the non-conforming market, but is the market saturated or will more lenders follow suit in 2007?
70 per cent of our panel agreed more lenders will enter the growing non-conforming market this year, and all agreed that the classifications needed to be simplified to make this market transparent for the consumer.
