Abstract
That the property market performed strongly in 2006 is evidenced by the fact that the number of loans for house purchase has increased, the value lent has increased and house prices have continued to climb upwards. Indeed, one month into 2007 there was still no sign of a slowdown, despite 3 quarter-point rises in the base rate since August 2006. However, that is not to say that lenders are not up against some daunting challenges. As the interest rate rises have made borrowing more expensive, the property market is expected to slow, which means that demand for mortgages will probably weaken. Lenders must also contend with rising levels of bad debt as well as increasing costs pertaining to regulation. It is these issues that shape the focus of this report.
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