The B word – Rob Clifford

As I write this article, a House of Commons debate on whether the Prime Minister will be allowed to push for another ‘Meaningful Vote’ on a UK deal to leave the EU, is taking place.

I wouldn’t be surprised if you had to check the date yourself to see whether this was written in March 2019, rather than October, because we appear to have been in this situation before, albeit with a different Prime Minister and a different deal. Although how very different those two deals are remains up for discussion.

The point is that this is a moment in time which feels all too familiar. Given the way things are progressing then it would not surprise me if that feeling of déjà vu returns again, potentially in January next year.

There is, of course, a lot of political water to flow under the bridge before then, but one also can’t help but feel that this ongoing stasis is deeply unhelpful to everyone. I am not of the opinion that ‘get it done’ means ‘get it done whatever the consequences’ but I do tend to feel that it would be nice to have a much clearer idea of when ‘it’ will be ‘done’. Whatever ‘it’ might eventually mean.

The underlying feeling with any major political issue – unless its stamp duty or something specifically impacting us, like the cuts to mortgage interest tax relief for landlords – is that the housing/mortgage market tends to continue ploughing its own, somewhat unique, furrow regardless. 

To some extent, I think it’s possible to say this with Brexit but there have also been plenty of sentiment surveys carried out which tend to suggest that people are genuinely ‘holding back’ when it comes to big decisions like putting a house on the market, or opting to purchase. The big question however is whether that sentiment is actually borne out by fact.

I read a very interesting piece recently from Bob Pannell, Economic Adviser to IMLA, which looked at this very issue, and whether what we tend to feel – transactions are down because of Brexit uncertainty – is actually the case.

Bob suggests that in the three and a half-year period since the 2016 referendum, that’s not really been the case, and that, ‘Brexit only really seemed to emerge prominently as an issue from late 2018, when the combination of a slowing global economy and Brexit uncertainties began to bear down on UK growth and household confidence and the proximity of the original 29 March deadline for leaving the EU loomed’.  

In other words, a combination of factors – not all Brexit-related it might add – did conjure up a period when the housing/mortgage markets appeared to slow down, and that some people not knowing there would be an extension, or no deal, or any kind of deal, understandably held back.

Since then however, and it has to be said post-March 29th, the activity figures have not dramatically changed at all, suggesting that the market has been ‘back to normal’ certainly through the Spring and Summer. However, what we can perhaps take from Bob’s analysis is that in the period leading up to a date suggested as marking the UK’s formal leaving of the EU, existing and potential homeowners are more likely to sit on their hands rather than make a big move. 

One might also surmise that the more ‘deadline dates’ we have between now and us actually leaving the EU – if that is what eventually happens – the more up and down ride for our market. I’m being somewhat pessimistic here of course, and conversely, we might get a rather different reaction should the UK leave the EU with a deal, on a date such as the 31st October.

Indeed, there is some conjecture in the market at present that, given the caution being exercised, when we have more certainty, a potential dam of activity in our market could burst. That there is a groundswell of people waiting to make their move, particularly in terms of putting homes up for sale and the purchasing of those properties. 

That, in itself, could be very good news for mortgage advisers and it would make absolute sense to be prepared, and to use all your marketing nous, to ensure you pick up business from those who might have been waiting to make their move. No-one is likely to deny that given the economic situation, and the greater complexity in our own financial lives, advice is a good thing and therefore your services should be in demand. 

Therefore, make sure, you have the technology in place to make the most of this potential new business, that you have the necessary support to up your resources and personnel should you need to, and that you have all the backing required to make a success of it. We’ll certainly be willing and able to provide this to our advisers and firms – why should you miss out?