First published by Mortgage Introducer
Enjoy it while it lasts?
From my perspective there’s no doubting the market is very buoyant at the moment. Which might lead some of the more pessimistic amongst us to suggest we should enjoy it while we can, more certain than most that it can’t possibly continue for much longer.
I’m not sure I subscribe to that view – in fact I know I don’t. A quick review of demand versus supply in the UK housing market is likely to tell you all you need to know about activity and pricing. And while the type of work may shift slightly in the near future – for us perhaps lower valued property/more first-timers – it is still going to take a considerable amount of time to deal with all the demand out there.
There has been a lot of conjecture around the so-called cliff-edge for transactions come the end of the stamp duty holiday, although it has to be said this has been dissipated by the decision to extend until end of June, followed by the partial holiday until the end of September.
Even with this absolutely necessary decision by the government, there may still be some worry about whether a huge amount of business has been dragged forward, leaving the potential for a significant drop-off in the last quarter of the year.
Demand will remain strong
I have to say I don’t share those concerns for a number of reasons. Firstly, and primarily, I only need look at our pipeline volumes to see what is coming through and it seems pretty clear to me that the numbers are not diminishing.
We are now at the start of June – anyone who has come to market expecting to purchase/sell over the last month is highly unlikely to do so by the end of June which means they will not get the full stamp duty saving anyway. That is understood, as is the fact that given their circumstances, the nature of their transaction, whether they are in a long chain, etc, they may not even complete before the end of September.
Which means, that unless they are a first-time buyer who will continue to receive a stamp duty holiday after September – albeit one at a lower purchase price level – they are not going to make any savings on the stamp duty and therefore that catalyst doesn’t exist for them. The fact that, in all likelihood, this won’t make one bit of difference to them proceeding is a sure sign that demand will remain strong.
Constant recruitment mode
As is the response of a significant number of stakeholders within the housing market, including ourselves. We as surveyors are in constant recruitment mode at present, and I don’t believe this is because we’re some sort of outlier success story that needs to continually add to our resources, both in-house and network.
It’s partly to do with our growth, but look across a whole variety of market participants, whether surveyor, conveyancer, lender or adviser, and they are all busy trying to recruit more staff. There’s a very good reason for this and it’s not because they all think the current activity levels we have are going to drop off a cliff – quite the opposite.
They’re also not recruiting for employees with short-term contracts that will finish at the end of September either. Like us, we’re looking to bring on board human resource that will be with us for the duration. So, as you can see, there is a very strong level of confidence amongst different property professions that may tell you where they think the market is going over the long-term.
And that’s also an important point to take home, because of course there will be seasonal/regional/local variations in activity – there always has been and there always will – but over a longer horizon we certainly believe that our business volumes, and the requests for our service, will continue to grow, and of course we have to recruit in order to fulfil that demand.
For us the need to do this is obvious. At present, like most other firms, there is no switch you can magically flick in order to bring on board a huge increase in capacity. By the same token, you don’t want to keep accepting business which impacts on your service levels which you end up not being able to deliver on.
Many of our peer group are actually turning down business in order not to have to do this – better to not start the work than begin, only to find you can’t meet your service KPIs and everyone suffers.
So, it’s a case of being sensible, planning for the future, and not ever believing that we should stop looking for that resource, particularly given how we see the future of the market (and our business) playing out.
Many firms in the sector will be grappling with the same conundrum, but it’s a positive problem to have, and should engender further confidence that the future looks very bright. It’s up to all of us to grasp those opportunities and hold onto them.