Don’t put too much stock in February’s business, warns Harpal Singh, managing director of Conveyancing Alliance Ltd
To those who might believe an increase in business throughout February is a precursor to what might be coming for the rest of 2011, I would suggest they think again. Certainly, our levels of business and anecdotal information from other sources suggest February was a particularly good month and we did see another further push in terms of remortgaging. However, don’t worry this is not another article about ‘the return of remortgaging’ I would suspect that many advisers are becoming rather bored with such comments, particularly if you have seen little or no increase in your own remortgage business.
However, the point is that February may have proved to be a good month for many the question is how is March faring up in comparison? I suspect that the expectations you had at the tail end of last month have not really been lived up to? Worryingly, I have heard a number of peers talk about March (to date) as being ‘disastrous’ – so why should this be?
Well, to look at the business conducted in February we will need to go back to the end of November/December and January – traditionally slow months for the property and mortgage markets, and given the perfect storm of poor weather conditions/Christmas/New Year/low consumer confidence, etc it is perhaps no surprise that the end of 2010/start of 2011 followed suit.
What does happen though is that the pent-up pressure, i.e. demand for properties/mortgages does start to build during these ‘quiet months’. Many people will have waited for the New Year to do anything and once January hits, they began to make their move. Decisions may be made in January but they do not bear fruit in terms of actual business until February which is why volume and activity may have spiked last month. Essentially, we can look at the market like a bottle with the cork in apply some heat to it and over time that cork will eventually pop out.
The problem lies in this very scenario, now that the pressure has dispersed we are probably looking at another two ‘quiet months’ namely March and April before we can anticipate a more fruitful May. Throw into the mix Easter and (heaven help us) the Royal Wedding and we may all have to appreciate a slow entry to spring. Plus we should not forget the ongoing influence of key macro-economic factors such as rising unemployment, a drop in consumer confidence, nervousness regarding interest rates, the austerity cuts, etc and it is little wonder that the rest of 2011 may not be viewed with overwhelming positivity.
However, without wishing to be the harbinger of doom there are pockets of activity and particularly in the property/mortgage sector, what I like to call ‘micro-climates’, which stand apart from an overall UK perspective. These are regional hubs and it is local supply and demand that creates them they could be a certain number of streets in any one area, or a certain part of a village and these conditions could be totally different to those that are being experienced just a few miles away.
The important point for advisers is to seek out these ‘micro climates’ and target them to find that all-important business. If your normal scope of activity does not hold such an area, then the firm needs to get off its collective backside and look for the hotspots – the chances are they won’t be too far away but they will need some research to find. There are now many websites which will show you were property is being bought and sold, plus why not make the effort to talk to a wide range of estate agents who cover different areas? If they do not have a mortgage advisory practice or affiliation not only will they be happy to tell you where the ‘micro-climates’ are but you should be able to secure an introducer arrangement to generate client leads.
You may well be lucky and work in a part of town which is bang in the middle of a hotspot, in which case you need to take full advantage and maximise the business you can achieve. We should not forget that climates can change quickly and frequently, therefore make sure you’re aware of when this one is likely to fizzle out and where the next one might be. Targeted marketing resources in a variety of areas should ensure you’re on top of not just your locale but others over a wide area.
Given the anticipation of a slower start to spring than we would all like, it is important not to take a ‘bums on seats’ approach. Adviser should take the opportunity to work outside their normal geographical confines there are micro-climates all over the country, the real skill is identifying them and ensuring you are in a position to provide the necessary services and pick up the business that is taking place. Don’t look to the skies, conduct thorough research and activity checks and the hotspots should find their way onto your radar.