Following recent market turmoil, Peter Williams, executive director at IMLA, believed that the market just needed a good dose of confidence.
He said: “We are not seeing widespread delinquency among borrowers, as happened in the 1990s. While house price inflation is falling and that pattern will run through into 2008, the simple reality is that, in aggregate, demand continues to exceed supply.
“As this suggests, the fundamentals remain sound. People’s jobs are secure, LIBOR is stabilising and remains low compared with the 1990s, and Bank of England Base Rate is now more likely to fall than rise. There is no systemic problem in terms of either credit quality or mis-selling of mortgages.
“While fully acknowledging the difficulties that do exist, a wider recognition of positives would go a long way to help the market move forward. It is clear we are seeing the start of a return to normality, with investors and consumers realising that the fundamentals of our market are solid and that there is no reason to stay out any longer. Shocks to the system do have an impact on everybody but confidence is beginning to return and overall we can now expect to see the market moving forward.”
Louise Cuming, head of mortgages at moneysupermarket.com, said: “He is looking through a rose-tinted glass if he thinks that confidence is all that is needed. The market is led by economics so firms are looking to the bottom line of profit as this is the ultimate drive.”
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