To say that the housing and mortgage market is built on ‘confidence’ would be a huge understatement, so much so that even during the last 15 months when the economy has taken a considerable pounding, and when many people took a significant impact to their finances, the impact of a growing confidence amongst home purchasers and owners has been absolutely evident for all to see.
Of course, government intervention provided its own considerable catalyst with the introduction, and then extension, of the stamp duty holiday but there was already plenty of evidence between the immediate period post-Lockdown 1 last year, and the announcement of the holiday, to suggest the market was going to do very nicely even without such a major demand-boosting measure.
That confidence has clearly grown over the course of the last 12 months, aided no doubt by the strong availability of mortgage credit, and by the pandemic and how it has reshaped the way we live and, perhaps more importantly, the way we work.
Hence, a considerable demand has grown from both existing and prospective homeowners who have either found their current property no longer meets their needs and circumstances and therefore they need to move, or it partially does fulfil what they want but they need finance in order to reshape those homes for a future which perhaps entails them spending more time there working, and less time commuting/travelling to work.
In essence, we’ve seen confidence translating into purchase demand, and remortgage/refinance demand, and it is perhaps little wonder therefore that advisers have felt the benefit of that. Coupled with the highly competitive mortgage market we currently have it doesn’t seem that surprising to hear adviser confidence is also back to pre-pandemic levels.
Recent research from IMLA, conducted amongst 300 mortgage intermediaries, found an almost universal 96% were confident about the future of the mortgage industry. That is a significant increase on the first and last quarters of 2020, when the figures were 82% and 85% respectively.
And when asked about the outlook for their own firms, the figures showed a similar level of positivity with 99% saying they felt at least ‘fairly confident’ with those feeling ‘very confident’ – 59% – again back to pre-pandemic levels when it was 61% at the end of 2019.
A variety of reasons were given by advisers about why they felt confident, some mentioned above such as the stamp duty situation, but there were others such as low interest rates, the return of 95% LTV mortgages, first-time buyers coming back to market and, rather importantly, the feeling that they have ‘got through’ the pandemic relatively unscathed.
I don’t think we can underestimate the importance of that last reason, and I’m still very conscious that we are not ‘through’ the pandemic at all, and that with different variants and strains Covid will be with us for a very long time to come in one way, shape or form. However, as lockdown has been eased, as the roadmap points have been hit and we have begun to see more of our society opened up, as more of the UK population has been vaccinated, there is light at the end of the tunnel.
We can also point to the UK housing market being an ‘insular’ one both from a geographical point of view, but as we’ve seen, in terms of how it has been able to cope far better with the nature of lockdown, etc, and the fact that – apart from that two-month period from mid-March through mid-May last year – it has been pretty much constantly open for business.
This all feeds into the demand we have seen, the growth in product options and certainly, from that, advisers’ ability to provide solutions to a far wider client catchment area than we might have hoped to, especially when the pandemic hit. There’s no doubting we might also wish to see a greater level of supply coming to market – in terms of both new-build and ‘second-hand’ property – but that has been a perennial problem for the UK housing market and is likely to be for some time.
With confidence at these sorts of levels, it might seem difficult to improve upon them, but from my perspective, advisers and firms will feel even greater stability and security, and feel a greater ability to grow their businesses, if they’re able to offer as many products and services to their clients.
It’s understandable that when mortgage activity is at these sorts of levels, when there are added deadlines to hit, and when you may be conducting record numbers of transactions, that this might seem like the only focus. But I’ve yet to meet a client who didn’t have another financial services need alongside that, and it makes perfect sense to establish a structure which ensures you don’t miss out on that business and income, whether it’s protection, GI, conveyancing, or legal services.
That need will be serviced somewhere, so why shouldn’t it be you who carries out that work, either yourself or via an introduction. There is really no need to let it go elsewhere – I’m confident that having used you for the mortgage, the client won’t want too either.
Mark Snape is chief executive officer of Broker Conveyancing