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Without the facts it’s best to ‘keep your mouth shut’ – JLM

by: Rory Joseph is director and Sebastian Murphy is head of mortgage finance at JLM Mortgage Services
  • 12/10/2020
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Without the facts it’s best to ‘keep your mouth shut’ – JLM
By our ‘back of a fag packet’ estimation, there have been approximately 10,000 predictions about what is going to happen to the UK housing and mortgage market since Covid-19 hit.


Every single one of them has been wrong, and every single one of those that are made add absolutely nothing to the workings of the market, how we get through this situation and continue to help customers.


‘Nobody knows anything’

‘House prices will crash by 20 per cent’ has been followed by ‘house prices rise at their fastest rate since 2016’. ‘Property transactions will fall by 20 per cent’, followed by ‘house sales rose by 15.6 per cent in August’. You get the drift.

‘Nobody knows anything’, goes the famous quote by Hollywood screenwriter William Goldman and it is as applicable in our market as it is elsewhere.

The reason is simple. Unless you were active in the housing and mortgage market during the Spanish flu pandemic of 1918, then the fact of the matter is that you’ve not lived and worked through a pandemic before.

What good are sweeping generalisations? Statements about UK-wide trends are almost useless when we all know our market is incredibly localised and there are huge disproportions in how the current situation is impacting different people.


Warning bell

There is obsession with what the future might bring. We have industry trade bodies telling us there is likely to be a housing market crash when the stamp duty holiday comes to an end next March.

There’s no data to back this up, but thanks for the warning. How damaging is it for consumers to hear these messages? The truth is we have a huge housing shortage in the UK and will do for the foreseeable future. Until supply meets demand, the outcomes will remain as they are now.

Let’s reiterate the fact that the market is doing incredibly well at the moment. We need honesty about the current situation not flights of fancy about what might be coming over the horizon.

Why not let the market unfold and assess it on an ongoing basis? The market is incredibly strong, and that is without a significant chunk of borrowers, for example, requiring high LTV mortgages like first-time buyers, who are not really being catered for at the moment.

If they were then we wouldn’t have a ‘mini-boom’ in the housing market it would be a full-blown one.


Stamp duty cliff edge

The messaging is out of hand. At a time when we should be encouraging consumers to engage with the mortgage and housing markets there are some who seem intent on putting people off based on pure conjecture.

There is too much focus on the ending of the stamp duty holiday – lest we forget, the market was very busy before it was even announced.

And, if there are worries about a so-called cliff-edge, then the answer lies in a tapering down of the holiday; presented with the data and facts of the matter, we’re sure this government would not be averse to extending it.

The positives of this current market are many and we should not be dissuaded from outlining those.

This situation is likely to continue for some time, and as advisers we need to live in the moment, and not be hampered by those who can’t possibly know what will happen next.

Sometimes, when you don’t know, you just have to keep your mouth shut.


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