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Now is the time for positive action

by: Graham Felstead
  • 30/11/2010
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Now is the time for positive action
As we approach the year end, it's always good to draw breath and review what has happened during the last 12 months before planning for the next. So what can we learn?

Probably the most important thing that I have learned this year is that you cannot rely on what has happened before to happen again. The unprecedented change that has hit our industry means that, to a certain extent, we are rewriting the rules as we go along.

However, as we reach December we can expect to see a slowing down of activity in terms of mortgage applications which might well afford you some valuable time to do a bit of planning for 2011.

Obviously, times are tough for a lot of people at the moment with the impacts of the government’s austerity budget still to be played out, the cuts in public sector employment to be implemented and the rise in VAT to be dealt with. All this will add pressure to the household budgets of many.

Whilst we could dwell on this admittedly downbeat news, there is a good argument to look at the positive signs that are there in the market.

The unemployment statistics offer some succour. For the last year, it has been stable at just under 8.0%, with the most recent statistics showing that for the three months to the end of August it dropped to 7.7%.

These levels of unemployment are much lower than those seen following the recessions of 1980-1 and 1990-1, although we still don’t know how many of the half a million public sector jobs will be able to be absorbed into the private sector over the next four years.

The important thing though is to recognise that not all people will be affected in the same way.

There will be people working in the public sector who will know at some stage that their jobs are staying. This will give them the security and confidence to plan ahead and be able to consider things like moving.

It’s been widely reported that many people have been taking the opportunity to pay down some of their outstanding mortgage debt. With confidence returning to those who have job security, they will be in a better position to consider moving as they are carrying less debt.

And, of course, remortgaging seems to back on the agenda.

With a rise in VAT being introduced on 4 January 2011 and inflation continuing to gallop ahead of target, a bit of prudent housekeeping now in terms of a remortgage could enable the household budget to go further.

The important thing for intermediaries is to revisit their client database and segment it into the different types of scenarios that people will be in.

If you’re not sure, then a quick phone call or email enquiry to get an update from your clients will probably be welcomed, especially if you can help them with some sage advice. If you are able to group your clients into a number of different segments, you’ll find it easier to communicate with them using email, saving you valuable time.

And with Christmas arriving, you have the perfect opportunity to send festive greetings and reacquaint yourself with them.

Graham Felstead is head of intermediary channel, NatWest Intermediary Solutions

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