2016 - the year 'the market decides'

2016 - the year 'the market decides'

So, welcome to a new year. To my mind, 2016 begins (as all new years should) with a large dollop of positivity about what the next 12 months will bring and a fired-up commitment to make it the very best year for your own business.

However, and here’s the rub, market forces will go a long way to determining how the next 12 months will unfold. Sometimes, you simply have to roll with the punches and react to what is happening, cutting your cloth accordingly and any other clichés you might care to mention.

In the housing and mortgage market, 2016 in particular looks set to be a year when ‘the market decides’ and, because of this, there is perhaps unsurprisingly a degree of trepidation about what comes next. This is certainly true in the mortgage market where a series of planned changes will have an impact on the ability of your clients to secure mortgage finance. I realise that this is true of any other year, but there are potentially some sizeable obstacles to overcome.

Take for instance, from a regulatory point of view, the introduction of the European Mortgage Credit Directive (MCD) in March, which is going to change the playing field in a number of areas. Firstly, lenders and advisers have to plan and prepare to implement the Directive and this takes time, money, effort and resource. One would hope it won’t impact on the ability of lenders to issue loans but it may well do.

Plus, of course it will usher in full FCA regulation of second-charge mortgages for the first time, and this again will have an impact particularly, I suspect, in terms of remortgaging, raising finance on existing properties, etc and whether that should be via a straight remortgage or via a second charge, unsecured loan, or further advance. Brokers in particular, who may well never have offered secured charge mortgages before will need to make a decision about how they consider them – something they’ve not had to do in the past. Those in the second-charge market appear to be cock-a-hoop about these changes because they effectively put them on a level-playing field with firsts for the (if you’ll pardon the pun) first time.


March of course is going to be a big month for the market. Between Christmas and New Year the Government issued its consultation on those who may not be required to pay the extra 3% stamp duty charge for a purchase of an additional property, not a main residence. At present, without seeing the final rules, it does look like landlords who have less than 15 properties currently (either personally or in a limited company), or are going to purchase less than 15 properties in one go, will need to pay the extra costs post-1st April.

It’s perhaps why you might have seen a surge in buyer interest from landlords ever since the start of December as landlords seek to beat the stamp duty increase deadline. There are of course many reasons why the deadline will simply be a bridge too far for certain purchasers – notably the length of any given property chain, but also the fact that some conveyancers may not be able to complete the transaction in time, or those needing finance to purchase may hit the buffers in terms of the timescale required from their chosen lender.

It’s incredibly important therefore that agents work closely with their landlord clients on this, because we may be just a week or two away from a point where a pre-31st March completion is not possible. This may impact on the decision of the purchaser to go through with buying a property, which may well have a knock-on impact on other chains and other clients and could cause some serious issues if that potential buyer does decided not to pay the extra stamp duty and pulls out. Agents will undoubtedly have to work closely with the client, conveyancer, adviser, possibly lender, in order to get the arrangements as spot on as they can. It could be a very uncertain period for all concerned.

So, while we look at the year ahead with optimism, there are some early bumps in the road which you may currently be unaware of which could have a major effect on what you do this year. The first battle is being forewarned and forearmed, the next will be how you react to those challenges and hopefully from this you will be able to formulate a plan of action that means you end the year in the winners’ enclosure.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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