Making the most of the market situation

Inflation and core inflation, Bank Base Rate (BBR) and swap rates and product rates, house values and asking prices and property completions, mortgage approvals and applications and completed loans, conveyancing instructions and completions…I could go on.

The point I’m making is that within all of the economic and market data we are presented with, there are numerous sides and shapes, they all mean something a little different, and they can all be construed – and indeed misconstrued – which can result in not just stronger or lesser market confidence, but also genuine changes in behaviour.

We are often in thrall to the data, and that’s because it’s so damn important. Take the recent inflation figures, for example. On the surface a not inconsiderable drop to 8.7% from double-digits, but the markets are more interested in core inflation, which actually rose, resulting in greater certainty of rate rises, huge swathes of mortgage product withdrawals, repricing, and a diminishing number for advisers and consumers to choose from.

This matters greatly, particularly in an interest-rate environment which was already very different to the last decade, and which is going to take some getting used to for many borrowers who’ve never known rates up at these higher levels.

It has clearly felt like a ‘disturbed’ market, particularly in recent weeks, and that follows a period when it was looking like we were getting to a more stable place. What did I say about the data mattering, and mattering deeply?

However, as always, there are positives to be seen and positives to not just cling onto but genuinely hold aloft as ushering in a brighter second half of 2023, even if we might now expect the MPC to act again – perhaps multiple times – and we still have any number of ongoing issues, not least both new-build property supply and supply of properties coming to market in general.

But, back to the hints of positivity. The latest survey from RICS shows its members – surveyors – were more positive last month about house price outlook, new buyer inquiries, and importantly, the number of new houses coming onto the market.

Before we might get too carried away, the figures show surveyors being less negative than previously, and there is still an obvious and understandable degree of concern across all three of those.

However, new buyer inquiries were the least negative this year, house prices were deemed likely to remain broadly neutral, while the number of new instructions was the strongest it has been since March 2021, and actually in positive territory – the first time after 13 consecutive negative readings. The number of properties listed for sale by surveyors was 38, which is still down on the five-year average of 40, but again up on recent figures.

Is this enough to hold onto as a sector? I think so, and I also believe this market has a resilience and, those working within it, an innate ability to make all this data work for them.

We only need to move back to last September and the mini-Budget debacle to show how it is possible to make the most of any market situation. Of course, the end of May was a significant obstacle, but my view is that we can continue to edge back towards a more stable environment in a relatively short space of time.

For advisers, indeed all of us active in the industry, it is important to make the most of the opportunities that are available to us. I read a recent piece about the intermediary sector and how it will continue to hold an absolutely pivotal role for years to come, and couldn’t agree more.

The adviser is, without doubt, front and centre particularly in terms of mortgage provision and distribution, but increasingly in terms of supplying clients with a wide variety of products and services needed now more than ever – protection, GI, conveyancing, surveys, searches, legal services, are just a few that should have the mortgage adviser as their source.

The data tells us a lot about the market, and what it increasingly tells us is that this is no benign environment, where we can sensibly predict exactly how rates, product numbers, prices, supply, costs, inflation, incomes, savings, etcetera, are going to trend. These are all subject to a huge variety of factors that can sweep them one way or the next, and for Joe Public, making sense of any of this is an increasingly difficult job, particularly when we’re talking about the biggest financial commitment they have, and their own financial needs now and in the future.

In this environment, the adviser should be the first port of call – and increasingly is. That is one positive that needs to be grasped and developed, marketed and exploited – consumers need you like never before, and that is a huge positive to take into the rest of the year and beyond.

Mark Snape is chief executive officer of Broker Conveyancing