2018 Predictions

04 January 2018

2017 was probably a year that we could all look back on as challenging, but in honesty a solid year’s performance was received yet again from the lending, building society and banking industries. Increased lending volumes in many product areas, the further launch of new challenger banks and technological innovation in the market were three big positives for me.

We enter 2018 with a more positive economic attitude to Brexit than we had at the start of 2017, with (at the time of writing) trade deals looking likely to be secured for the UK which is providing more certainty. I do not see any real effect of Brexit on the market per se in 2018, but keep an eye on the strength of the pound to really see how the markets feel about the process. The general opinion seems to be that once we hit phase two of the process then the pound will continue to strengthen.  However usual economic factors, such as any move on base rates and also inflation and unemployment stats going the wrong way, would most likely counter any strengthening of the pound.

I mentioned above that the continued launch of new challenger banks in 2017 was a very positive thing, but I suspect that there will be a slow-down in 2018 with the amount of capital in the market reducing for “green fields” with investors looking at more established players that have successfully launched.

One of the drivers for new banks is the draw of deposits as a funding line, for lending out on both retail and commercial lending. Two schemes that the government introduced to assist liquidity in the market (TFS and FLS) are both finishing early in 2018. I think this will reinvigorate the securitisation market as both of these schemes effectively killed this market off. Look at for a lot more activity in the securitisation market in the second half of 2018.

In 2018 the later life lending market will continue to thrive as more innovation comes into the market to provide lending for over 55s, and as the regulator continues to come around to the relevance of the product. I think we will see further launches of new equity release lenders and also further white labelling of existing providers’ systems to allow mainstream lenders to tap into their customer bases that could benefit from this type of product.

So 2018 is likely to be a year very similar to the one just gone in terms of performance, but with its own challenges and opportunities to succeed and make and impact.

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Debbie Staveley
Director and Owner,
bClear Communications

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