Given we are now a few weeks into January, it’s possible to get something of a feel for how the year has begun, and potentially see the seeds that are being sown for 2024 business and income levels.
Certainly, from my perspective, the market ‘feels’ a lot more positive about the year ahead, and while I fully accept ‘feelings’ can be wrong, there’s been much to suggest that we won’t be quite so reliant on remortgage activity over the next 12 months, albeit still the case that the majority of business will be from borrowers with maturing loans.
That said, from a number of sources, including our own, both residential and buy-to-let purchase activity has improved already this year, and there’s no doubting that lower rates will have played a considerable part here.
I tend to buy the view that many would-be purchasers would have effectively sat out the market last year, due to a combination of higher interest rates making affordability difficult to achieve, still poor levels of property supply, and a tendency to want to see whether house prices were going to continue to fall.
In those three specific areas, we now clearly have lower rates from what was available in 2023, supply inching up as a greater level of confidence is returned to the housing market, and potentially house prices showing signs of bottoming out.
Indeed, according to the latest Nationwide House Price Index, while house prices remained flat during the end of 2023, over its course they were down just 1.8%. Halifax’s index said that prices rose month-on-month in December, and actually rose across the year as a whole, up 1.7% on the previous year.
So, while there were many predictions of significant, even double-digit, house price falls over the course of 2023, they have not really materialised, and those purchasers who may have been waiting for a bargain, are likely to be thinking that the continued demand versus supply imbalance probably means we are not likely to see any significant falls in the short- to medium-term.
That being the case, they might be feeling now is the time to rise from sitting on those hands and begin to explore what is available in a lower interest rate environment.
However, one potential, short-term sticking point – although this may turn into a significant positive – is what might happen on Wednesday 6th March when the Chancellor stands at the Dispatch Box and delivers his Budget.
We’re all acutely aware that November’s Autumn Statement was short on housing market measures but the signposting for March is somewhat different and there has been talk about further support for first-time buyers, plus – quelle surprise – the potential for action on stamp duty.
Raising thresholds, or introducing a holiday, or both, or even scrapping it altogether are being openly discussed, and if you’re considering a purchase anytime soon, you might well want to wait it out to see what, if anything, is announced.
Stamp duty changes tend to come in with immediate effect, and there will be plenty of potential buyers who could significantly benefit from any cuts, particularly landlord buyers who already have to pay a 3% stamp duty surcharge, and would clearly welcome any measures which save them money.
Recent history also tells us that stamp duty incentives tend to be very well received by the property buying (and selling) public, and they tend to illicit positive increases in activity which will be beneficial to all mortgage market stakeholders, particularly advisers.
After all, these are clients who you would not ordinarily be seeing in any given year unless their current mortgage was up, and therefore it’s essentially ‘extra’ business to be written as a result of their purchase intentions.
The important point here is not just to make the most of their mortgage needs but those that will also be self-evident and should be taken care of by the adviser.
Conveyancing is one such area – no client is going to be buying a home without a conveyancer, and it would be far better if the source of that firm recommendation was the adviser, who can keep involved in the process and steer them in the direction of a conveyancer who is a specialist and can get them their new home in the desired timescale.
If the client is comfortable with your recommendation on what might be the biggest financial decision of their lives, then we’re confident they’ll be willing to accept your advice on which conveyancer to use. Don’t miss that opportunity, and don’t miss working with a platform like Broker Conveyancing, who can make this process as easy as possible, preventing income for your business, and a happy end customer.
Keith Young is managing director of Broker Conveyancing
