It looks like the fireworks are about to start in more ways than one.
I can’t be the only one that views the current political impasse around Brexit with something approaching mild horror. Despite Theresa May suggesting that ‘95%’ of the Brexit deal is there, we have the small matter of her not just securing the deal itself but getting it through Parliament.
This, when she is leader of a minority government propped up by the DUP who appear not to like her plan one bit, with the same being said for a large number of her own party – and that’s without the Labour Party whose leadership have said that, unless the deal meets its ‘red lines’, they’ll vote against it as well.
While all this is going on, we have something akin to open warfare in the Tory Party itself and you can’t help wondering – given some of the extreme language being used about ousting her – if Theresa May won’t be checking for barrels of gunpowder herself when she visits Parliament over the next couple of weeks. Her tenure as both leader of her own party and the Prime Minister of this country appears to be hanging by a thread.
Of course, the ongoing Brexit negotiations, the current lack of a deal, the potential economic implications, etc, all weigh heavily on a mortgage and housing market which at one point might have thought it would come through in relatively decent nick, unharmed by the UK leaving the EU. That train of thought appears to have left the platform long ago, and we now have talk about significant falls in house prices, rises in interest rates, with the inevitable impact on borrowers’ ability to repay their mortgages.
A looming ‘no deal’ arrangement appears to make the consequences far worse for all concerned. Just recently, AMI suggested that rates were likely to rise and indeed that we might actually all be far too optimistic about the real consequences of Brexit, with or without a deal. The advisory trade body suggests the Bank of England was right to talk about the potential for significant drops in house prices, even if many in our industry have poo-poo’d the idea of a 35% fall, which the Bank has apparently stress-tested for.
AMI believes ‘Brexit uncertainty’ is already being felt across the market and, certainly when it comes to purchasing, there is a growing amount of anecdotal evidence that both potential sellers and purchasers are putting off any plans they might have had to come to market. Indeed, if there is a growing ‘wait and see’ approach adopted by those who might ordinarily put their homes on the market/look to buy, then this is going to have a serious impact, for example, on agent activity and indeed on the amount of money the government can recoup via stamp duty.
All this provides us with something of an incendiary few months (and beyond) to navigate and it’s perhaps no wonder that some industry commentators are warning those who may be reliant on purchases to look elsewhere for business volume/income. I suspect mortgage advisers have been doing this for some time, and the strength of the remortgage market (particularly given its ongoing competitive nature) doesn’t seem likely to dissipate anytime soon. In fact, as we move close to next March I suspect more and more borrowers will be looking to ‘fix’ their monthly mortgage repayments in order to ride out any potential ‘storm’ over the next few years.
That remortgage opportunity of course brings with it a large number of ancillary opportunities including protection, GI, legal services, and conveyancing, which it would be remiss of advisers to pass up. No-one can of course predict the future, and we may get the fabled ‘soft landing’ that a number of Brexiters expect, however that is looking increasingly unlikely and therefore the groundwork you put in now, could deliver the ways and means by which you can survive in any downturn.
It may not be pretty at present – and let’s be honest a number of our politicians could do with a rocket or two under them – but we must all prepare as if the worst-case scenario will be the outcome. I sincerely hope that isn’t the case, but given the current situation, who would bet against it?
Harpal Singh is managing director of Broker Conveyancing