First published by Mortgage Introducer
It has been a long time coming but I would hope, given the resounding victory for the Conservative Party in the General Election, that we are at least on the road to Brexit certainty, albeit with the caveat that when it comes to the UK’s future relationship with the EU there is much to be resolved.
That said, the legislation will determine that the UK will now leave the EU on the 31st January under the terms of Boris Johnson’s deal, and that 2020 will be spent determining what those new trade arrangements will be. It will clearly not please everyone as it appears the country is still almost evenly split on the issue of Leave or Remain – but the Election result sets out a direction of travel with no second referendum and no prospect of the UK remaining in the EU.
In the end, the Conservative party sensed the mood of the majority of the country better than other parties – while basic and open to interpretation, the message of ‘Get Brexit Done’ did cut through and it has been clear that many Leave voters, particularly in the North and the Midlands were keen for the Government to do just that.
When deciding on the 2019 ‘Word of the Year’ I suspect it will be a toss-up between ‘certainty’ and ‘uncertainty’ but the significant majority garnered by the Conservatives gives the markets, the economy, and indeed, the housing/mortgage sectors a degree of certainty that has clearly been absent for some time.
We certainly recognise the difficult position advisers have been placed in when it comes to dealing with clients who have been unsure about what happens next, and whether now is the right time to be making big-ticket purchases, especially property.
Clients come to advisers looking for that certainty – questions abound: What will happen to rates/house prices/product availability/criteria? Is now a good time to be buying? What happens if I lose my job? What about incomes and inflation? At the best of times, these can be difficult to call, and of course will depend on the client’s own view, but over the last 12-18 months, especially as the UK’s leaving of the EU has been repeatedly delayed, it has been impossible to give any sort of definitive answer.
And these issues don’t just dominate the thoughts of clients, but advisory firms and their owners as well. How can you invest money, time and resource into different areas of the business if you’re unsure how things will play out? Clients unwilling or unable to make decisions impact firms – when they believe putting things off is the best option, what choice do firms have other than to do the same?
The positive of course is that the market has continued to grow; intermediary share of UK residential lending is still at strong, dare I say it, record levels, but threats have emerged. Product transfer business is up but income per case is materially lower, and the likelihood is that protection sales with product transfers are scarce compared to other transactions. The rise of execution-only and a concerted lender push to attract more of this business, especially with a regulator entirely sympathetic to the cause, is also significant.
It means that advisers have had to be at the top of their game – and the need to be so will intensify in the years ahead. Fortunately, in terms of Stonebridge firms, that’s exactly what we’ve seen throughout 2019 with strong activity levels across our three core product areas. However, we recognise that a number of our firms may well have put on hold that internal investment or commitment to increased resource while they wait for that elusive market certainty, particularly around the direction of travel the UK might be taking with the EU.
Now that is much more firmly set in stone, we feel 2020 will be the perfect time to make that business commitment, in full expectation of an increase in activity/transaction levels, and some key advice opportunities that will only grow in the years ahead, particularly in the specialist and later life lending fields.
However, it’s also completely understandable that firms might want (and need) support with that and we’re anticipating a year of delivering this to our member firms. Furthermore, all Stonebridge members will be benefiting from the opportunities we provide, particularly around our Revolution system but also in terms of the access to products and services they would not get elsewhere.
Overall, while a December election probably wasn’t to everyone’s taste, having a definitive result most certainly was. We have a clarity of purpose that simply wasn’t there just a couple of weeks ago, and we fully expect to see a boost in terms of activity levels in the mortgage market, which advisers will be able to capitalise upon in delivering advice there but also in terms of meeting their client’s protection and GI needs.
Rob Clifford, Chief Executive of Stonebridge