Recession finally ends but what now for 2010?

Official first estimate figures released by the ONS today confirmed what many had predicted, the UK finally pulled out of recession at the end of 2009.

Whilst on the face of it, we can breathe a sigh of relief that the worst post war recession is finally over, the weakness of the GDP figures (0.1%) casts serious doubts over the strength of the recovery.

Most economists had predicted Q4 GDP to come in around 0.4%. The reality is that the UK very narrowly escaped a record 7th quarter of recession.

It has to be borne in mind that this is a first estimate for GDP and that all first estimates have been revised since 2007 so it may very well be that in coming months we will see Q4 GDP revises upwards to nearer 0.3% . That being said the figure has shocked many economists and yet again calls into question the accuracy of many of the economic surveys that have been predicting far stronger recovery.

So what now for 2010? With so much in air at the moment it is going to be very difficult to call. A general election is due within 5 months and whilst the Conservatives still lead in the polls, a clear cut victory is far from secured. A hung parliament remains a more than remote possibility and is probably one of the worst current threats to economic recovery. Tax rises and spending cuts are just over the hill and the removal of monetary stimulus is only a matter of time. Add to that the thorny issue of inflation and the way ahead for 2010 is far too difficult to predict.

So far as the housing and remortgage markets are concerned, much is going to depend on public reaction to the media headlines on our technical exit from recession.

Property is always a confidence game. Following the 1990s property market recovery was subdued for many years because the public lacked the confidence in the market. This time around we have not yet seen the vast wave of repossessions and negative equity issues and therefore the public may feel more confident about the future of the property market

The remortgage market will be dictated by the publics attitude to the imminence and likelihood of interest rate rises. We still consider that BoE rate rises will occur during 2010 but the anaemic GDP figures may have an effect of the public perception of the timing of rate hikes and therefore we may see a continuation of the subdued remortgage market in the first half of 2010.

We welcome comments from others as to their views on the property/remortgage markets as a result of the GDP figures.

FSA intervenes on mortgages arrears

For article see Reading between the lines the FSA has made it clear that its rules on lender's behaviour around mortgage arrears are not fit for purpose. One must ask what the FSA has been doing since its intervention into the Mortgage market.

Given the failure of regulators in general, but the FSA in particular, to foresee events over the last 2 years and either to prevent or reduce the impact of unnecessary risk taking, this latest admission must be seen as a final straw in the FSA's ability to create a proper regulatory environment in which to transact mortgage business. With an impending election it is unlikely that this requirement to regulate on the FSA will be changed but it is likely that the FSA will be challenged post-election to demonstrate that it adds value. Whether this is possible is a matter of how they respond to the concerns in the mortgage market. Based on past record one must question whether this will happen.

Lender's like any other business have to ensure that they are profitable, whilst balancing with issues such as reputation and their regulatory requirements. Working with the principles of Treating Customer Fairly has always been difficult because of their vagueness. On the other hand, because of the lack of flexibility, black letter rules can fail to provide effective rules in individual circumstances.

Where next? A full re-write of the Mortgage: Conduct of Business together with the associated cost to lenders? The market already reeling from the failure of appropriate regulation to then be hit by tighter rules reducing the ability for lenders to assist the economy in recovery.

We suggest that before making knee-jerk statements of the kind released today a full consultation is carried out, with lenders and consumer bodies, that ensures that the rules produced create a market where risk levels are acceptable, find the right balance between the lender's commercial needs and the borrowers rights, and appropriate sanctions against lenders for non-compliance.

Are we on the precipice of a remortgage Tsunami

Following our blog earlier this week on the possibility of interest rate rises there have been a number of comments on various financial news sites regarding the same.

Today Santander have revealed some rather frightening statistics. According to Santander Mortgages Remo Index there are potentially nearly 900000 UK home owners looking to remortgage within the next six months, more than half of whom are aiming to grab good fixed rate packages before they go

Borrowers have seen a large number of highly competitive fixed deals come on to the market recently and with many commentators predicting a base rate rise this year, homeowners now seem more inclined to play it safe with a fixed rate deal.
If these statistics are correct this would mean an increase in remortgage volumes to 145000 remortgages a month.

With the majority of remortgage transactions in this country being handled by a handful of legal firms including breezeplus, and assuming that most of these remortgage volumes will be centred amongst a few high street banks, it is imperative that these players are geared up to handle such a huge spike in instructions.

Lenders and lawyers alike have become accustomed over the course of 2009 to ever reducing levels of remortgage work and staff reductions have been inevitable. Both are now faced with a very difficult call. Do we increase staff overheads now in anticipation of a wave of new work or wait until the wave hits and risk being washed away.

The view at breezeplus is that a tsunami of remortgages is inevitable during the course of 2010, but that its timing is less clear. We are investing in staff numbers now to ensure we are able to take advantage of the upswing and to make sure that we can maintain our quality standards.

Whether we have made the correct call, only time will tell, but we would welcome comments from others as to their views on the market

Time to fix your mortgage rates?

Inflation is back, bringing with it the prospect of enforced interest rate rises rather sooner than policymakers would wish.

The Inflation Indices for December released today showed the highest monthly increase since the 1970s. In response, gilt yields have risen sharply and so too has the pound. Many economists had predicted a big surge in inflation for December because in the same month the year before there had been a number of one off factors which had acted as a depressing influence on the indices, including the cut in the rate of VAT to 15 per cent. But the surge to 2.9% was not anticipated

The reversal of the VAT rate has not yet been factored into the indices, this will impact in Januarys figures with the result that it is more than likely that the inflation rate for January will substantially breach the 3 per cent level at which the Governor of the Bank of England is forced to write a formal letter to the Chancellor explaining why inflation is so far adrift from target.
This time last year many economists were predicting a second Great Depression, house price falls of 40% + , years of stagflation or deflation. 12 months down the line the economic experts have proved to have exaggerated considerably to the downside; house prices rose in 2009, the financial markets are still standing, unemployment has not ballooned, and inflation no deflation is our current concern.

The GDP figures for Q4 2009 are due for release on 26th January and if predictions are correct are likely to show that we are at long last out of recession and on the road to recovery. Prices are racing ahead as if the economy is again operating at full tilt.

The markets are now confidently pricing in a rise in Bank rate for later this year. There are some economists predicting rate rises before the general election.

With all this in mind, and also taking on board recent SVR rate rises by lenders the statistics are pointing towards fixed mortgage rates having reached their bottom and mortgage rate rises being just around the corner. Fixed Rates have become unfashionable recently with many opting for headline low tracker rates. But is it now prudent to lock into these historically low fixed rate mortgage products before the market shifts upwards as it inevitably will.

It is the brave borrower who is prepared to continue the wait and see policy on mortgage interest rates and those that leave it too long could be caught short.

Weathered the recession: have you planned for growth?

Come along and join me for this great networking opportunity where I will be the guest speaker. Meet with like minded people, make contacts and discuss business opportunties over a full English breakfast.

Those who follow my blog or LinkedIn will know that I am a Director and the Head of Company Commercial and Corporate Recovery at Breeze & Wyles Solicitors LLP. The firm's Corporate Recovery team was launched in mid 2009 to meet the changing demands of a number of high profile clients. The team has handled a number of corporate recovery instructions within this period and associated work such as claims against directors and book debt recovery.

Networking is an effective way of generating new business leads, raising your companies profile and promoting your services and products.

Member: - £22.5 Per Person
Non-member: - £30 Per Person
Latest Booking: - 8 Feb 2010
Contact: - Jodie Reid
Tel: - 01707 398400
Email: - mailto://

Announcement: Snow Hero 2010 Winners

Last week, Breeze & Wyles launched a competition to find a person in Hertfordshire who has done something exceptional for the community or for their workplace or business, or shown exceptional team spirit over the last week of snowy and hazardous conditions (full details of the competition can still be found on our website at

The joint winners are Liz Hawkins, Aukjen Rooke and Georgina Matthews who were nominated by Pat Burt. In her nomination Pat said:

"I would like to nominate Georgina Matthews, Liz Hawkins and Aukjen Rooke who work in the District Nursing Team at Hoddesdon Health Centre. Of course they are dedicated nurses all year round but in the snow they have gone beyond the call of duty. In this very bad weather they have been covering their regular patients residing in Hailey, Hoddesdon, Broxbourne, Wormley, Nazeing and Roydon. Their days have started at 7.30 am and they have also been working on their days off and not taking any breaks for lunch etc. If the patients could not be reached by car they have walked to their homes. They have also helped patients who heating has failed by collecting electric heaters and taking them back to the patients homes. They have prepared breakfast for those that are diabetics and visited those that they felt were vunerable or needed support. Vital medication was also collected on behalf of the patients who's families were unable to get to the chemists."

The £100 prize was awarded to them on behalf of Breeze and Wyles at our hosted breakfast seminar this morning by Mark Prisk MP for Hertford and Bishop’s Stortford. The three winners decided immediately to donate their prize winnings to the emergency fund for Haiti.

Is 2010 likely to repeat 2009 for the retail sector?

There is a significant amount of evidence that the retail sector of the UK economy will suffer in much the same way as it did in 2009 over the forthcoming months. R3 the Professional Association of Insolvency and Turnaround specialists reported on 30 November that "Retailers should prepare for New Year bloodbath" based upon opinion from within their ranks see

However, news on the high street is that retailers have seen a much better christmas than was expected. Is that the case?

Good news of itself may mean much for the wider economy but creditors may see this as an opportunity to push for receovery through formal proceedings on the basis that post christmas the debtor is in the best position it is likely to be in for some time. The financial status of the debtor can only deteriorate as the market hardens for reasons such as: -

1. continuing rise in unemployment that leads to lower confidence meaning less spending on the high street;
2. where expenditure over the Christmas period being higher than epxected what available cash there will be to spend will be diminshed.

All of the above opinion applies to the supply chain to retailers. the example of which is the collapse of Woolworths. The failure of Woolworth's had ramifications beyond those directly involved in the business and estimates suggest that there were a significant number of knock-on insolvencies as a result.

With all of this in mind there is no better time than now to get some advice is the financial situation seems parlous. Failure to do so may limit the options available to you, your business or company as creditors become even more agressive in their approcah to recovery.

Snow Hero Competition

Breezeplus: We are pleased to announce our Snow Hero competition and the chance to nominate someone for a £100 award. If you know of someone who you would like to nominate for this award please view Please note that this award is only open to people in the Hertfordshire area.

Breezeplus: Snow Hero Competition

We are pleased to announce our Snow Hero competition and the chance to nominate someone for a £100 award. If you know of someone who you would like to nominate for this award please view Please note that this award is only open to people in the Hertfordshire area.