Is this year’s uncertainty next year’s opportunity?
It would be remiss to look forward to next year without reflecting on the last twelve months. As we moved into 2020 the certainty from the decisive general election result, followed by some clarification around Brexit, provided a boost to the property market. These factors, combined with some of the lowest mortgage rates we have ever witnessed, meant activity hit the highest levels for some time.
However, uncertainty loomed as it became increasingly apparent that a local outbreak of a novel coronavirus in China was set to become a major global pandemic. And the resultant lockdowns and consequent cessation of economic activity impacted virtually every segment of industry and society in one way or another.
The property sector did not go unscathed with transactions grinding to a halt as agents had to shut up shop and as property surveys were put on hold. However, demand did not dissipate. As lockdown restrictions were eased, and as the Chancellor introduced a stamp duty (SDLT) holiday, activity levels soared once again.
Lenders struggled to keep up, however, resulting in backlogs and slower turnaround times. Meanwhile, interest rates reverted to all-time lows and lenders reacted by increasing margins and raising their own rates to stem the flow of business. Eventually, many lenders managed to tackle their backlogs (although others continued to struggle). From Henry Dannell’s perspective, the resultant disparity in rates, turnaround times and delivery further heightened the importance of our services to our clients.
As 2020 draws to a close, we can look ahead to next year with some optimism as we hope for the successful rollout of a Covid-19 vaccine. In the property market, the SDLT holiday ends in March, which may result in some adjustment in property prices although a staggered extension has been muted. However, over the medium term, the majority of property commentators are predicting modest price inflation over the next five years.
We expect lenders to turn their focus to growing their market share through aggressive targets, which is potentially good news for our clients who – with the right guidance – could benefit from more competitive rates.
More generally, we think step change is likely to continue in the way we live and conduct business. Making sense of this in order to make sound financial decisions will require more diligence than ever. Here at Henry Dannell, we have put ourselves in an even stronger position to help our clients navigate the property market – growing the team in order to continue to offer the high quality, bespoke service you have come to expect.
As ever, the Henry Dannell team are here to advise and help clients navigate the mortgage market. Should you need our help, please do not hesitate to get in touch. We look forward to hearing from you and we wish you a very happy Christmas and a happy and healthy new year.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.