Within 24 hours I read two pieces on the current state of the housing market. One of them was in The Daily Telegraph entitled, ‘The housing market is set for disaster, and this shows why’, and the other was in The Guardian and was headlined, ‘The signs are Britain is not heading for a property crash’.
Each piece used an array of publicly-available data and comment from various commentators to come to their conclusion – as detailed in the headline – and with the greatest respect to the journalists who wrote the piece, neither should be treated as a definitive assessment of what might come to pass.
Quite simply, nobody knows just how this market will play out, and while history of course tells us what might potentially happen, we can also say that this moment in time is unique and therefore the norms of the past may not apply.
Now you might well argue that these type of articles are merely tomorrow’s ‘fish and chip wrappers’ – if we still wrapped food in newspaper or indeed if most people still consumed their news via print – but, even if that is the case, it can still matter, particularly to those consumers who may be weighing up their mortgage and housing options and are likley to be swayed by such sentiments.
Of course, given the variety of views, who are they to believe? If there was a more definitive, widely-held belief about what might happen, then it would provide more confidence to the general public.
There is not. And there are plenty of conflicting voices who are likely to be able to justify any conclusion with the stats and data available.
However, my point is that no-one is able to predict the future and, given that clients are likely to believe you, the adviser, over any others they encounter, it’s actually very important to point this out.
We have to play the cards we have been dealt – the current market conditions, the current product availability, the current affordability criteria, the current pricing, the current needs and circumstances, I could go on.
While of course, you can provide an educated opinion about the possibility of what might happen in the future – I think we all might agree that Base Rate is likely to rise further and the topsy-turvey nature of lenders’ product pricing is also likely to be more topsy than turvey in the short-term – but you can’t know when (or if) that might change.
Likewise when it comes to lender service levels, you have to take a view on where they are right now.
You can’t ‘take a punt’ or ‘cross your fingers and hope’ that the lender who might have the most appropriate/best-priced product for your client’s needs, is actually going to be able to meet the desired timescale of the consumer. Or is somehow going to be able to look at your documentation in half the time they are saying it will take.
It’s another reason why transparency from lenders on service levels right now is so important. Advisers shouldn’t be asked to guess if looking at documents is actually going to take 15 days rather than the six publicised, and the same goes for DIPs, valuations and full mortgage applications.
Yes, lenders might like to get service levels down as soon as possible, but advisers can’t place business on a nudge and a wink that this might happen, especially as we enter the summer period when resources are likely to be under even greater strain as many employees take holidays.
In other words, we have to live and work in the moment. And, let’s be honest, the ‘moment’ is a tricky place to be writing mortgage business.
Don’t feel the need to sugarcoat the reality of today’s market; you should let your clients know what you (and they) are currently up against. Forewarned is definitely forearmed and, given that a big part of your job is going to be managing expectations, I don’t see any issue in doing this from the absolute outset.
And if all concerned, but lenders and surveyors and conveyancers specifically, can provide accurate information on just how long it is taking them to carry out their work, then we all have a much better chance of providing an accurate assessment and picture right now to clients.
It is really about the here and now for them; what happens in the future is for another day.
Bob Hunt is chief executive of Paradigm Mortgage Services
