It may well be that the entire UK population has Seasonal Affective Disorder (SAD) but I do get some sense that having moved to British Summer Time we are all trying to be that much more positive about the current economic situation.
Indeed in the mortgage market there seems to have been a concerted effort to push a glass half-full viewpoint in the last few weeks. The Nationwide Price Index showing a monthly house price increase rather than another fall garnered a number of headlines although it was tempered slightly by every man, woman and dog urging caution and suggesting this was a momentary blip. We shall wait and see.
The rest of the positivity appears to be purely anecdotal with estate agents saying they have seen increased footfall in the first quarter of 2009, with first-time buyers notably having inched back into the market, although whether this 'evidence' actually converts to completions is another matter. Other firms involved in housing transactions, notably Conveyancing Alliance Ltd, have also suggested that house purchases seem to be on the rise. Are we to read into this that a growing number believe the market to have bottomed out in terms of falling house prices? There are clearly certain 'bargains' to be had and we know of buy-to-let landlords who are looking to add to their portfolios in the coming months.
Unfortunately, as we are all aware, accessing finance and competitive products is another matter entirely, and I don't just mean it's difficult for clients, it's also difficult for advisers too. Too many lenders appear stuck in a short-term position at present, which brings us to the issue of dual-pricing - one which has not gone away and if anything appears to have got worse in the past few weeks.
It was interesting to see the Association of Mortgage Intermediaries (AMI) say last month that dual pricing no longer remains a threat to brokers. A rather odd statement given that many of the most competitive mortgage deals are still only available direct, leaving advisers out in the cold. The statement triggered a picture in my mind of George 'Dubya' Bush back in 2003 standing on the USS Abraham Lincoln with a huge 'Mission Accomplished' banner draped behind him. How wrong he proved to be and how wrong AMI are now.
The fact of the matter is that many mortgage advisers have already left the market and many more will follow if the lenders continue to only offer their best products direct. It is understandable that when times are tough, consumers want to get the most competitive product meaning they pay as little as possible. However, as all advisers know sourcing the 'most suitable' mortgage is never just about price - there are other factors to consider which makes, in our opinion, professional advice vital for all consumers. However, by continuing with a dual-pricing policy in these circumstances lenders are in danger of creating an 'advice vacuum' because the fact is, this is having a hugely damaging effect on the intermediary sector.
In general most would accept that mortgage advice is a positive service that consumers can benefit from, however the dual-pricing policy certainly does not have consumer's long-term interests at heart, given that it is only likely to facilitate a contraction of the avenues from which consumers can access advice from. At present the lure of a direct deal may be too great for many consumers; it is only when they come off these special rates in 2/3/5 year's time that they may find advice and advisers in short supply.
There are glimpses that a number of lenders are looking to put themselves into the market in a more meaningful sense with more money dedicated to lending this year and a small scale move back into areas which have appeared off limits, for example 90% LTV products. Intermediaries are crying out for these types of product offerings however in the great majority of cases, they are still out of reach. If they continue to be unable to complete mortgages, their income will continue to fall which will inevitably lead in only one direction - down and out of the market. Is this a good state of affairs for the British consumer? I think not.
Yes, I acknowledge that in the past the intermediary sector has benefited from dual-pricing and some would suggest that we should simply take it on the chin now that the boot is on the other foot. However, these are truly extraordinary times and the impact of this ongoing round of dual-pricing is having a much more considerable effect than many perhaps realise. We at Email have called on advisers and lenders to open a dialogue which focuses on this issue and to acknowledge the true long-term impact it is having on consumers and advisers. One would hope that AMI do not feel it is a problem which has already been put to bed - it has not, in fact it is still very much awake and could wreak considerable havoc on all stakeholders for many a long night.
Michael White is chief executive of Email Mortgages
EIS and Seed EIS sectors
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019