Some close to the UK mortgage market believe its success or failure in the coming year is heavily reliant on how the existing debt crisis is handled.  The numbers speak for themselves in regard to growth for the market in 2011.  The year started on a strong note and then quickly deteriorated at the beginning of Q3.  The Eurozone has been blamed by many for the brakes to be quickly applied to any growth factors at that time.  Consumer confidence plummeted, mortgage lending criteria got even tighter, and home values truly started the rocky descent downhill.  Even heavy lending competition could not stop the free-fall.

As the coming year unfolds, many think the hard times could get a little harder before they start to improve.  One of those is John Charcol of Ray Boulger.

He believes: “The Eurozone crisis will have the biggest bearing on the UK mortgage market next year. Things are likely to get worse before they get better.”

Paul Smee also commented on the well-being of the market over the coming months, saying: “As a by-product of sovereign debt worries, lenders face challenging conditions in wholesale funding markets and these could have negative effects on the cost and availability of UK residential mortgages through some or all of next year. But if European leaders navigate a comprehensive and sustainable way through Eurozone problems, current financial market stresses could heal and the previous pattern of gradual improvement in cost and availability of funds could re-emerge relatively quickly. This, in turn, could have a major benefit on UK growth prospects and boost household confidence and appetite to borrow.”