Philip King, chief executive of the Institute of Credit Management
The Spending Review is going to lead to big public sector job losses and workers worried about their future are going to tighten their belts.
It’s worth looking at the knock-on impact this will have. Businesses that rely on public sector workers for their income, whether they are food outlets, hairdressers or coffee shops next to government buildings, will see the impact of the cuts as they cascade throughout the employment chain.
There is going to be a huge need for brokers to make sure their time is used practically and in a way that delivers maximum return, and the end game is going to shift.
There is no point in wasting huge amounts of resources working with a client that is almost certain to fail the criteria of the lender and those criteria are changing too.
It’s no longer just about income level or loan-to-value figures; there will be more focus on the ability to repay.
That ability is determined by the servicing of existing financial commitments, interest rates, and longer term prospects and circumstances. In short, what looks like a safe risk in the future may be somewhat different from what it is now.
The successful brokers will be those who understand the changing views of the lenders and who use that understanding to manage their own portfolio better.
Also answering in this week’s Market Watch are:
