First published by Mortgage Introducer
A September refresh
September always feels like a ‘new year’ even if we are just four months away from the actual end of one. It must be something to do with school days and going back to that feeling of wearing a new uniform which tended to look new for all of a few days.
I’ve already seen and heard some ‘back to school’ adverts so we’re not too far away and there’s a lot to be said for hoping the 2021-22 school year is a lot more normal than the one pupils have endured over the last 18 months.
For advisers and indeed anyone active in the property market, September also feels like the start of a new period. August increasingly resembles a perennial ‘quieter’ month simply because so many people take time off and there is plenty to juggle in terms of resources during this period.
September always feels different though, and it’s perhaps not surprising that we within the sector want to hit the ground running and sustain a strong activity momentum over the course of the next four months, and hopefully beyond.
Confidence in the lending sector going into the last quarter
I read an interesting survey from Shawbrook Bank recently which focused on advisers and their views on the potential challenges that might present themselves in the months ahead.
On a positive note, 82% of those who took part said they were confident about the lending environment through the rest of the year, and this undoubtedly chimes with what we’re hearing from lender clients about their ambitions for the rest of 2021.
Of course, September is likely to see an uptick in completions as those seeking to take advantage of the partial stamp duty holiday look to secure that saving, but it’s evident from lender pricing, for instance, that lenders are looking to secure business for the months beyond this.
And that even if as seems likely, purchasing does fall back, we will have a particularly strong remortgage sector especially when those who are able to refinance see the types of rates that are currently on offer.
Below 1% for a 5-year fix is evidence of the competition that exists and the need that lenders have to get their funds out into the market.
Broad worries over issues with valuations are nothing new
There are of course a number of unknowable’s still around in terms of what impact the pandemic will continue to have. Furlough is due to finish and the end of government support schemes will play a part here – 34% of those advisers surveyed said job uncertainty was the biggest obstacle for their client, but I’m hopeful that the predictions of horrendous job losses – which were made during the first lockdown – will not be as bad as was once feared.
Interestingly, when asked what the biggest challenge might be, 76% of advisers said ‘issues with valuations’, which seems like a broad worry and there was no specific information given on what those ‘issues’ might be.
Of course, in this environment there is always going to be some worry about valuations, especially for both advisers and clients looking at some of the apparent house price gains that have been made over the last 12 months.
What the client believes the house is worth and what our independent assessment might be can obviously differ, and there is always going to be a level of frustration when they do not match.
There’s also ‘issues’ to be addressed sometimes in terms of turn-around times, for example, the so-called ‘ping-demic’ recently impacted significant on the ability of some surveyors to carry on with physical valuations, and we continue to look at how to manage this but also to see what more we can do with desktop valuations in order to turn these around in a quick timescale.
Managing expectations is key
Overall, it’s important to manage expectations here, both from our perspective with lender clients, but also in terms of what the client might be expecting from their valuation.
We are not seeking to provide valuations out of kilter with client expectations just to frustrate but these have to be backed up by the data available and an assessment of what the value is based on a wide variety of variables, not just the fact that someone down the road has their house on the market for £X.
There is much to be positive about for the rest of this year and the ‘school year’ beyond – we hope that valuations are not ‘the biggest obstacle’ to overcome for those involved in the mortgage/housing process. From our perspective, they certainly shouldn’t be.
Simon Jackson is managing director at SDL Surveying