Certainly, according to the Bank of England, mortgage lending did not end on a high in December. Lending for house purchases was £11.5bn – the lowest since January 2015 – while remortgaging at £8.1bn was also considerably down on October (£9.2bn) and November (£9.5bn).
Now, I’m fully aware that December tends to be a ‘quiet month’, obviously because of the Christmas holidays; it’s now a question of whether that quietness continued into January.
At the Conveyancing Association (CA), we’ve continued to voice concern about the impact both regulatory and political changes are having on the number of housing transactions. The buy-to-let sector has been hard hit where purchase activity has been subdued (to say the least) since the introduction of the stamp duty changes and the changes to mortgage interest tax relief. There are some indicators that towards the end of 2017, landlords did start adding to portfolios, but the numbers have clearly been down over the last 18-24 months, and will be for some time to come.
The property investment market
Buy-to-let has always been a specialist market of course, but it appears to be getting even more specialist with so-called ‘amateur landlords’ less likely to buy and more landlords using corporate vehicles to purchase.
My view is that as time progresses, conveyancers are going to need to show the necessary specialist expertise if they are going to be deemed ‘worthy’ of dealing with transactions in sectors such as buy-to-let, later life lending, equity release, and others. We’re already seeing, for example, certain buy-to-let lenders operating a limited/closed panel of conveyancers to deal with limited company cases – their belief is that not all conveyancing firms have the necessary experience or expertise. Instead they want to use a limited number of firms in order to cut down on perceived issues and, in the case of one lender, this means that (as it currently stands) only nine conveyancing firms can act on these cases.
It will of course be for conveyancers to make their decision on what parts of the mortgage market they’ll want to focus on. Many may simply stick to their knitting and continue in the high-volume, mainstream sector. Others might sense a growing opportunity to show their specialist credentials in various sectors which look like growth options for all. Many are already badging 2018 as the year of the specialist mortgage – if that does prove to be true then conveyancing firms might have to look again at their offering and cut their cloth accordingly.