Talking to agents day-in, day-out I’m acutely aware that supply issues remain a huge priority and an ongoing issue for all concerned.
I think it’s fair to say that 2014 ended with something more akin to a whimper rather than a bang. The data being released now seems to suggest if not a full-blown slowdown then certainly a plateau of the market – it remains to be seen what overall impact the stamp duty changes announced by George Osborne last month will have in the short-term however for most areas of the country it should provide a fillip.
Most commentators appear to think it will provide, at the least, a short-term boost to UK housing transactions as the vast majority of purchasers will be making a saving of at least some cash. Unless of course you’re over the £937k ‘threshold’ and then the move is in the other direction. While we have only just got going in January we are now well over a full month into the new regime – admittedly with the Christmas and New Year break in between – so it will be interesting to see the end of year activity figures for glimpses of that much-promised ‘boost’.
Judging by the latest British Bankers’ Association mortgage approval figures in November it would seem that the stamp duty changes will be most welcome if they do translate into a busier marketplace. Mortgage approvals from the big high-street banks were down 20% in November compared with November 2013 and one can perhaps argue that towards the end of 2014 we were finally seeing the real impact of the FCA’s Mortgage Market Review (MMR) kicking in.
Indeed, it is perhaps the high-street banking giants that have been most impacted by the MMR and its requirements to increase the qualifications of its staff as well as making the affordability criteria they have used to assess borrowers that much more stringent. It was always anticipated that this created something of a perfect storm, particularly for those banks that in the past relied heavily on their branches and direct-to-consumer channels to sell mortgages.
With mortgage interview times having to increase it has been a tricky time for these organisations which is why we have see much more engagement with the intermediary community by the banks. It’s a simple fact, but not being able to sell as many loans through these direct channels has meant a rekindling of relationships with the broker fraternity. Now it is brokers in the box seat as these banks look to make up for the fewer loans coming through branch/telephone ‘advisers’.
I think we are also seeing a much savvier client when it comes to sorting out their mortgage. The message of ‘shopping around’ is finally hitting home and those looking for a mortgage know they are only going to get access to one lender’s products if they go into their local branch. Go to a mortgage adviser and the whole market is opened up – increasingly so when we consider lenders like HSBC are now making their products more available to brokers.
For agents it’s important to recognise the ‘cultural’ shift that has already taken place in the mortgage advice market – intermediary business levels are only likely to go one way and therefore developing a strong relationship with local brokers may be a good move. Many agents will already have this place but some won’t and for those that don’t now is definitely the time to make those bonds in order to develop potential introductions and to keep abreast of all the ongoing developments that make the mortgage market so interesting, and so absolutely relevant to the agency world.
