A week or so on from the Autumn Statement (at the time of writing), I can’t help but feel there was a significant opportunity missed by both the chancellor and the government, specifically in terms of providing a much-needed boost to the housing purchase market
for the start of 2024.
As an industry, we were probably hanging on every word of Jeremy Hunt’s address to the House of Commons, only to reach the end of a statement that gave us very little to celebrate.
Hunt could have ‘gone large’ again on a stamp duty cut or holiday
It is a real shame, because from my perspective there are some green shoots that could have been capitalised on and which, with some positive intervention, could have created a much more activity-heavy environment.
Product rates
We tend to start with rates. Bank base rate (BBR) eats up a lot of media coverage but essentially it’s all about product rates. Even prior to the decision to hold BBR for the second consecutive month, the market continued to see a large number of lenders cutting product rates.
Swap levels have a lot to do with this, of course, and there’s been a stability there — and some notable dips — that has allowed lenders to feel more certain about the cost of funds and to translate that into their products.
Be positive about a potentially more upbeat environment, but be most positive about what you can achieve with the clients you have
Not forgetting, of course, that perennial problem in an environment with over 100 lenders — namely, competition and securing lending volume and market share.
Just recently, again, we’ve seen the impact of this year’s lack of activity — particularly purchasing — on some of the big, mainstream lenders’ overall lending volumes. There’s no doubt they are moving rates to get a headstart on 2024, should it follow the same pattern as this year.
In that sense, we may anticipate further ‘slices’ being taken off mortgages as the weeks progress, and this will help both purchasers and remortgagers, specifically in terms of affordability, which has been a huge hurdle for many borrowers in the past year.
Supply continues to play a major role in the purchase space — from a new-build and a homes-for-sale angle — but again we’re seeing an increase in homes coming to market, if not a big change in new-build activity.
The current situation is a lot more positive than that of last spring. That said, business activity — particularly purchase — still looks subdued
Marrying up finance with finding a home you want to buy remains a big challenge, and it could have moved both dials significantly if the chancellor had intervened.
We could have had a replacement for Help to Buy, which is being sorely missed, particularly by the developers.
And Hunt could have ‘gone large’ again on a stamp duty cut/holiday, which traditionally has helped to increase activity levels.
Instead, we got some potential planning changes and the announcement of an extension to the Mortgage Guarantee Scheme.
But these feel like the smallest dials to move and they are highly unlikely to elicit the big response for which the entire industry was hoping.
More positive?
That being the case, what are we to make of what is coming over the horizon in 2024? More of the same? Well, if that looks like early 2023 rather than mid-2023, it may be a more positive year.
The current situation is a lot more positive than that of last spring. That said, business activity — particularly purchase — still looks subdued and advisers are going to earn their corn throughout the year with the work they will have to put in.
There’s no doubt lenders are moving rates to get a headstart on 2024, should it follow the same pattern as this year
The case remains that, certainly for advisers, making the most of every client/opportunity that presents itself is non-negotiable. Working your way through every client need — whether purchase, remortgage or product transfer — will be vital.
It is imperative you cover their general insurance, protection or conveyancing needs and they don’t go elsewhere or simply do nothing.
Be positive about a potentially more upbeat environment, but be most positive about what you can achieve with the clients you have.
Mark Snape is chief executive of Broker Conveyancing
This article featured in the December 2023/January 2024 edition of MS.
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