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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Latest Comments

Jimmy_McCoy
Jimmy_McCoy 16 Sep 2016

I think that the main reason to buy garden purchases in last minute is because people always search for the best deal. In summer months there are abundance of seasonal goods and it means more low cost

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Jimmy_McCoy
Jimmy_McCoy 16 Sep 2016

Buying a home often is more expensive than you expect. There are lots of hidden costs such as: stamp duty, surveys and valuations, mortgages etc. that can add more than 10% to the total bill

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Homebuyerconveyancing
Homebuyerconveyancing 15 Sep 2016

We are seeing a massive influx of Homebuyers using online Estate Agents. The winners are the online portals that still aim to manage the customer journey to homeownership. They provide a valuation service,...

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oliviaG
oliviaG 12 Sep 2016

Without a doubt renovating can truly be very beneficial to many homeowners but it depends to a great extent on the condition of your home and the parts of it you want to refresh. Before you start you should...

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oliviaG
oliviaG 29 Aug 2016

So true about cats!

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Jason Roberts
Jason Roberts 25 Aug 2016

Any predictions what average rent will be at the same time next year, anymore drops coming?

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dylanvan
dylanvan 19 Aug 2016

very good, thanks for sharing

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SecomTech
SecomTech 19 Aug 2016

Firstly, I either lodge with DPS or do not take a deposit...secondly, If a tenant has not received a confirmation their deposit is secured with either a scheme or in an insured account with an agent/landlord,...

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jasonevans
jasonevans 19 Aug 2016

Belvoir has over 15 years of experience in property lettings, buying and renting and is one of the best agencies I know about. I have heard that they revived an award for the hard work. Really amazing...

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jasonevans
jasonevans 19 Aug 2016

Usually these areas are least affected when it comes to unexpected economical collapse.

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TheWaspNestRemover
TheWaspNestRemover 11 Aug 2016

You agree to pay for the treatment needed to get rid of fleas, ants, mice, wasps nests and other pests unless you can prove that these are a result of us not meeting our repairing responsibilities or these...

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madisonwelch80
madisonwelch80 02 Aug 2016

16% is quite a raise. Let's hope this tendency won't continue for long.

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