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2016 - the year 'the market decides'

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2016 - the year 'the market decides'

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John Phillips | Agency Convey

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

Paul
Paul 25 May 2016

Estate agents are pathetic when it comes to fees. They have this 'I had to do it at 1% because that's what the others were quoting' mentality. We are the most expensive agents in our area, charging double...

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HMO Midlands Landlady
HMO Midlands Landlady 24 May 2016

Tenants disappearing into the night is common from shared houses ( licensed and un-licensed HMO's) often when they owe considerable rent- they remove all their possessions, leave key in room and tell other...

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CommercialTrust
CommercialTrust 20 May 2016

With the bulk of the market controlled by large developers, profit rather than necessity determine the pace at which homes are built. There are hundreds of thousands of plots that have planning permission...

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Johna
Johna 20 May 2016

"Easier said than done" is what I would say. Of course, it would be more than great to have more in quality and affordability, but I do not trust talk anymore.. What is said is not what is happening.

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Johna
Johna 20 May 2016

in my humble opinion being fair like THE most important! I myself have had bad experience with unfair landlords... not to mention that I know how to do a proper end of tenancy cleaning since I am a fantastic...

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richardrawlings
richardrawlings 18 May 2016

NB - even if we doubled our commission levels in the UK, we'd still be by far the cheapest agents in the entire world.

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Agent_PeeBee
Agent_PeeBee 18 May 2016

Clueless. Someone needs to take these people's computers away from them so they can do no more harm than they already have.

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richardrawlings
richardrawlings 18 May 2016

Nonsense! The cost of selling a house nowadays has little bearing on the fees charged. Don't believe your own spin on this. Fees have spiralled down to pathetic levels in areas where weak agents have allowed...

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Simon Oliver
Simon Oliver 16 May 2016

The best solution is to buy a property that has built-in income generating potential: a nice house with a couple of gites in the grounds is a good start. In France, the rune of thumb is that one 2-bedroomed...

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WPD
WPD 12 May 2016

I suggest the answer is to have the notary system being one legal person who represents both parties. Having experienced it a couple of times in France it was a dream compared to our dysfunctional system....

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warren
warren 03 May 2016

It's enough to make me weep into my Pimm's :(

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james anderson
james anderson 03 May 2016

The sad demise of the croquet lawn...

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