the unknown unknowable
What a year 2012 turned out to be.
We started the year with many predicting a Greek exit from Europe and with suggestions that the Union’s insufficient universal fiscal policy, and fragmented supervisory mechanisms would lead to currency failure. As the year panned out, fortunately, neither of these scenarios came to pass.
The year past did however give us plenty to consider with LIBOR, money laundering, and trading fraud scandals of enormous proportions involving the likes of Barclays, HSBC and UBS. Terms such as ‘fiscal cliff’ and ‘sovereign default’ became familiar to all. In 2012 we had the final MMR, a marvellously successful Olympic Games, the Leveson Enquiry, and Her Majesty the Queen’s Diamond Jubilee to name but a few significant moments from the year. The bridging finance sector continued to be a lively one with significant movement in the market and with continued competition driving down the effective cost of credit to borrowers.
By and large 2012 was an eventful year defined by the feeling of a slow but gradual move in the right direction towards recovery.
Making predictions about what lies ahead is a perilous task in its own right. As we look forward at 2013 a great deal remains uncertain. What is certain is that conditions remain challenging with austerity continuing to bite. Britain presently stands ahead of Spain, France, Italy and Greece with debt as a percentage of GDP of circa 500%. Growth remains slow.
The main issues in the year ahead will certainly include the potential consequences of any upward shift in the Bank of England Base Rate on the real economy, liquidity remaining strained, and the effect of new regulation coming into force. These factors amongst others will inevitably continue to impact upon the mortgage market. Although liquidity constraints show signs of potential easing, it is perhaps overly optimistic to expect any significant change to the prevailing conditions where obtaining a mortgage offer for residential or commercial property remains an uncertain and often cumbersome task.
Interestingly in the bridging finance market after several hectic years of expansion we anticipate a degree of calm as the sector continues to mature with the emergence of a core group of stable, institutional, market participants who are each able to provide the market a service or set of products it requires. The liquidity bubble which formed in the bridging finance sector going into 2010 has over the course of the last two years lead to a degree of saturation and we would be surprised to see any significant, informed, new entrants. In fact we anticipate that some existing market participants may look to diversify their lending scope in the hope of moving into less competitive waters and within this context expect that secured lending will become a theme in the year ahead.
Whatever comes to pass there will inevitably be a few twists and surprises.
At MT Finance we specialise in bridging finance loans, short term loans, auction finance and bridging loans secured by a 2nd legal charge where that bridging loan is for business purposes.