It is not thought that conditions in the mortgage industry will improve for some time, with the Association of Mortgage Intermediaries (AMI) warning that the problems bring felt will continue next year.
The AMI predicts that total mortgage
lending for 2008 will be half the level it was last year, and its research paper 'The Credit Crunch: One Year On' forecasts that lending will not improve until at least 2010.
Chris Cummings, director general of the AMI
, said that "The impact of the credit crunch is likely to be felt much longer and deeper than was expected 12 months ago. And despite the intervention of the US Government the housing and mortgage markets are not likely to recover in the short term.
Mr Cummings continued. "What we now need to see in his final report is a clear set of actions for the UK Government. The US has set the bar in terms of the level of intervention required. We need to see the UK follow this lead."
The AMI's research paper lays out its view of what the future holds for mortgage lending, and suggests how the housing market and those affected by its fluctuations, such as intermediaries, can adapt in order to weather the credit crisis.
Mr Cummings said that a drop in the number of intermediary companies is expected, but that it is not all "doom and gloom", because lenders can adopt a more "balanced portfolio approach with a spread of geographical risk, property sectors, and borrower types."
Risky levels of sub prime mortgage lending are largely blamed for the credit crisis which broke last summer when thousands of borrowers started defaulting on their mortgage payments.
Far from being the end for mortgage brokers
, he assures them that the changing market "presents an opportunity" for them, as more borrowers are unable to find a loan and turn them for mortgage advice
"A customer-focused, advice-driven business model, rather than a volume machine is likely to serve firms well." Mr Cummings recommends.
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