Mortgage – Interview with Deputy CEO Ben Thompson of Mortgage Recommendation Bureau
“Stamp Duty needs a proper rethink, especially right now, and you can quote me on that” says Ben Thompson, Deputy CEO at Mortgage Recommendation Bureau, on the finish of our dialogue on the present state of the UK property market.
In an interview with Right this moment’s Conveyancer, Ben Thompson, Deputy Chief Govt Officer of Mortgage Recommendation Bureau seems forward along with his predictions for the property market over the following 12 months and past.
Inform us about what you’ve seen within the final 9 months
In short the yr may be break up into three distinct segments; Q1 was the Boris bounce, when the nation lastly felt like trying up a bit as a substitute of navel gazing and the market was starting to maneuver.
Q2 was fully unexpected and really tough for everybody. The large optimistic I take away from that interval is the best way the trade pulled collectively to provide you with a collective plan for the way it was going to find a way re-open safely. Moreover, we had some wonderful lobbying from the trade by way of discovering a manner for the housing market to be re-opened having carried out new ‘safe moving’ practices. The Authorities actually listened and took time to grasp how necessary the housing market is for jobs and the financial system and duly re-opened England in May, adopted by the remainder of the UK on the finish of June.
It didn’t take lengthy as soon as the market had re-opened – maybe as quick as 7-10 days – to see the pent up demand to be launched and it’s turn into very robust by way of exercise month on month since then.
That the market as a complete may even have practically hit the numbers that had been forecast this time final yr in a pre-Covid world says an enormous quantity about how a lot the trade has achieved in a considerably decreased period of time and is testomony to its resilience on all fronts.
What in regards to the subsequent 12 months?
Whereas SDLT has had a optimistic affect, probably the most necessary issues to grasp about its success or not is whether or not it has had the specified affect on the broader financial system. In fact we gained’t have the ability to measure this emphatically till nicely into 2021 nevertheless we are able to see new recruitment on this sector, we now have seen new spending in different associated sectors and naturally that suggests there’s a corresponding multiplier impact that tends to occur when the housing market has extra transactions and general spend. I’d anticipate that this 9 month vacation has positively generated important extra spending and at an extremely necessary time. In fact, the general tax receipts equation should work too.
Little doubt there’s some quantity crunching occurring in authorities round this and the end result will affect any determination on whether or not to increase the stamp obligation vacation or not. Elevated housing transactions, increased ranges of homeownership and equity to aspiring FTBs seems like the fitting set of aims. That works for the financial system but additionally in the long term creates the means probably for there to be much less burden upon the state, for issues like long run care and presumably pensions.
Individually, demand for the fitting kind of housing stays robust with lockdown persevering with to make folks take into consideration not simply the place they reside and what they reside in, but additionally who they reside with, plus their general way of life by way of work/life stability. There’s good proof that there’s a transfer away from cities to homes with gardens for instance.
I’m a little bit of an outlier by way of 2021, in a lot as I stay fairly optimistic. There are various causes to be unfavourable, the truth is too many to listing. Nonetheless, as counterbalance, there’s additionally the truth that folks’s properties are actually being prioritised by way of their spending, there’s a wall of cash constructed up by these lucky sufficient to have carried on working and to have saved cash via 2020 – when confidence and a few normality returns, this cash can be spent, thereby serving to job creation and financial development. I additionally assume there’ll ultimately be a considerably euphoric feeling upon beginning to visibly exit the pandemic malaise, and this could assist shopper sentiment, accepting there can be a big swathe of much less lucky folks too, which I really feel very unhappy about. The ultimate level and actually necessary level is that 2020 has had good momentum when the market has been open. Nonetheless, this has been with about half the mortgage merchandise versus 2019 and with a lot decreased LTVs. Because the SDLT associated froth dissipates, I anticipate LTVs to return throughout the board from the big lenders and thru as operational capability returns, mortgage product availability also needs to return. It will assist to cushion the affect of the tip of the varied incentives and hold the market shifting via 2021.
And past that?
I do assume proper now it’s courageous to forecast actually past subsequent yr. There’s a lot we don’t know. However I do assume that Authorities recognises the significance of a wholesome and energetic housing market. I additionally assume it sees clearly that increased ranges of homeownership (to my earlier level) are most likely an excellent factor. It feels as if housing coverage will assist our market over the approaching years, whereas if I look again, sure, we now have seen extra landlords snapping up homes, however in fact this has led to a big discount in homeownership. I’d wish to see the fitting landlord proceed to play a significant position in serving to folks to have first rate housing to hire, however I’d very very similar to the share of homeownership to extend again to over 70% of tenure, as this can be good for the UK financial system, good for folks’s lives and households and fewer of a burden upon the state in future a long time, one thing which proper now seems extra related than ever.
