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The mortgage market’s naughty and nice list for 2017 – Bamford

by: Pad Bamford, business development director at AmTrust Mortgage & Credit
  • 11/12/2017
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The mortgage market’s naughty and nice list for 2017 – Bamford
From legislative injections in the buy-to-let sector, to a base rate rise and a housing dominated budget, 2017 has seen its fair share of action. Pad Bamford reflects on the past year, putting together an industry naughty and nice list.

‘He’s making a list, and checking it twice, gonna find out who’s naughty or nice…’

But enough about David Davis prior to issuing resignation ultimatums, let’s focus on our own market and those who might be worthy of a neatly-wrapped present under the tree this Christmas, and those who perhaps should not be holding their breath for any major gifts on Christmas morning.

It has been an incredibly busy year, partly fuelled by the ongoing political shenanigans that tend to decide where our market is heading, but also in terms of market developments, with (to misquote Ed Sheeran) ‘the shape of yule’ in 2017 being rather different to how it looked 12 months ago.


A chancellor’s gift

First up for a gift, with a meticulously written card from chancellor Philip Hammond, are the UK’s first-time buyers.

In years gone by they might have felt utterly confident that they were treasured and well-loved by all stakeholders, only on Christmas morning they’ve opened their present to find that it’s actually a box with nothing in it. Now, however, they’ve got their present early and it seems to resemble a couple of thousand pounds.

The thing is, when they take it out of the wrapping, it’s not real money at all but is effectively the gift of not having to save as much for a first home purchase. Good news in itself, but they’ll still need thousands of pounds to get started. They’ll then need to find a higher loan-to-value (LTV) mortgage, jump through the affordability hoops – not forgetting the small matter of finding a home they want to buy.

The real present – courtesy of the Office for Budget Responsibility (OBR) – might actually be going instead to existing homeowners whose present comes as a direct result of this stamp duty cut. For them, it’s likely to mean ever-increasing house prices, increased equity, and the chance to secure mortgage loans at highly competitive rates. There’ll be many homeowners who will feel like a glass of sherry and a mince pie to toast that particular windfall.


Committed to action

And what of our politicians? Well, there’s no doubting that housing policy and action has been on the nice list this year, and we have a prime minister, chancellor, Department for Communities and Local Government (DCLG) and housing minister all appearing to be committed to action.

No doubt the private housebuilders might be sending them all a number of tokens of appreciation because it appears they are still in the driving seat in terms of meeting this country’s housing supply shortage.

The government might feel like it has little option but to rely heavily on big builders, however one wonders if some further support to SME housebuilders and developers wouldn’t also go amiss if we’re to get near to the 300,000 homes target set.

By the way, this is set for the middle of the next decade, so the government is not exactly pushing the envelope here, especially when it might well feel (at this stage) that they won’t be governing the country by then anyway.


Dubious intents

Who else is deserving of a gift this Christmas? Well, what about those who have campaigned against the building (and selling) of leasehold homes?

Leasehold has been a constant issue throughout 2017 and this rather dubious practise appears to be on its way out. Apart from some exceptional circumstances, one has to wonder whether there is any place for leasehold homes, and if they have been built and sold for anything other than extreme profiteering – I’d like to see the reasoning behind such a decision.

Much industry, media and consumer focus and criticism appears to have done the job – although those who have bought such homes might be wondering if their circumstances will change in 2018. It would appear that a leasehold home is not just for Christmas, but could cause problems for a lifetime.


The rise of the machine

Finally, let’s save our last gift for the humble intermediary. Despite many suggestions that the robots are going to rise up and render them meaningless, the advisory community continues to prove its worth and value to the public, remaining by far the most dominant distribution channel.

Of course, technology will shape the advice market and could fundamentally change it at that, however one suspects that many people will still want the good sense, advice and professionalism of a human being to recommend their mortgages for many years to come.

And on that note, I will say, enjoy the break over the festive period – I suspect you will have deserved it.

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