Brokers’ fortitude will see them through this ‘depressing and dispiriting’ situation

10 Dec 2018

 

Let's get one thing out of the way early on: it's almost impossible to write anything about our market, our industry, our situation, our future, without currently seeing it through a Brexit lens. 

I’ve tried, God knows I have, but I can’t help but look at proceedings in Westminster and wonder how we might have got to this point?

 

It reminds me of the line from If by Rudyard Kipling:

‘If you can keep your head when all about you

Are losing theirs and blaming it on you…’

 

Unfortunately, some rather prominent politicians appear to be incapable of keeping their heads, while plenty appear to be losing theirs, and almost all are quite happy to play the blame game. You hesitate to use the phrase laughing stock, but outsiders must view this and wonder if pantomime season hasn’t kicked off early this year. In this context, to talk about the impact on the mortgage and housing markets seems just a little presumptuous. 

How might we know what the true impact will be when we appear so far from a deal and when it seems obvious that so much more water will pass under our political bridges before then?

 

Stagnant, soft market
And yet, the impact is quite clearly already with us. Recent statistics reference a ‘stagnant’ market or at best, a ‘soft’ one. Clearly transaction numbers continue to tail off and, while many existing borrowers might be feeling a significant urge to sort out their mortgages for the long-term to ride out the bumps ahead, we are also told we are in sort of a stasis. This Brexit limbo has people – quite understandably – waiting to see the cards on the table before they make their move. This is especially if you are not subject to any time constraints, there is nothing forcing you to move or sell, and you can afford to wait it out. Of course, there will always be those who have to move, and indeed we might see an increase in buy-to-let purchasing as existing and potentially new landlords decide the ‘soft’ nature of the market means now would be a good time to add to portfolios.

 

Rely on remortgages
However, I suspect it will be the remortgage and product transfer market which continues to deliver the bulk of business for mortgage advisers. In that sense, the market remains a pretty strong and positive one. If existing borrowers do want to ensure greater mortgage certainty over the coming years, now would be a good time to secure a deal, and advisers will clearly remain the number one distribution channel to deliver this type of business. But what happens as we move closer to the 29 March and beyond is anyone’s guess. The market will of course continue to function but devoid of any wider certainty, and without knowing what the impact Brexit might have on our economy, jobs, GDP, wealth, trade, you name it, I suspect we’ll be in something of a holding pattern. How long we remain in it is anyone’s guess.

 

Depressing and dispiriting situation
It’s a rather depressing situation and somewhat dispiriting but that’s just the way it is at the moment. What I don’t deny is the fortitude of this industry, and advisers in particular – they have faced worse situations than this, come through them, and let’s not underestimate the demand and need for advice at this time. It is perhaps greater than it has ever been. In that sense, whatever happens with Brexit, we will no doubt get through this. We might all however benefit from knowing exactly what ‘this’ is and some semblance of certainty in order to allow us to prepare for it.

Bob Hunt

Blog Archive

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