So here I am once more… as the old song goes (look it up, it’s a prog-rock cracker).

Back on these hallowed pages and back for another year of blood, sweat, tears, tiaras, tantrums, phone slams, swear words, fist bumps, high fives, sighs of relief, long hours and cheers of glory. Yep, the mortgage industry has returned for another season and have we got a show for you this year? You bet we have.

This year is chock full of surprises; things we can’t even imagine happening probably will, as well as all the things we can confidently predict, like long stints of time waiting for free legal firms to pick up the phone. Boom, and we’re off.

Although 2020 may not give us the flying cars and trips to the moon on holiday we all thought, 40 years ago, would be happening, it will nonetheless provide us with technological advancements. Like the mysterious API link into lenders and even the widespread acceptance of E-IDV checks. However, it is amazing that, when we think about what we expected 2020 to be like, the reality is that in many cases we are not much further forward in our industry than the status quo 40 years ago.

We also probably did not ever think that we would once more be standing outside Europe and trying to negotiate a trade deal. We all know what is going to happen here: a long, drawn-out period of threat and counter-threat. This has already started with Boris’s rallying call: “I’d rather pay tariffs than accept any more EU rules.”

While this will largely be ignored by many for the first half of the year, the second half could well become more fraught as everyone gets nervous that ‘no deal’ will really mean no deal this time – before a last-minute breakthrough occurs and a rather unsatisfactory deal all around emerges that everyone claims is just what we always wanted.

Flying start

The spectacular election success has given rise to the phrase ‘Boris bounce’, which also prompts some rather unsavoury imagery if you think about it too much. However, there is a palpable sense that much uncertainty has given way to a sense of urgency once more in the property market. Estate agents are smiling again and brokers have been whisked off to a flying start, which is just what the doctor ordered.

Throw in a potential ‘Make Britain Great Again’ Budget and we may just pull this off. Well, as long as trade wars, global economic worries, Middle East unrest, flu pandemics, crazy weather patterns and the lack of a trade deal don’t throw us off balance.

The Bank of England has been in pessimistic mood (#shocker), despite the fact it felt it didn’t have to cut rates so early after telling everyone it probably would. This was eminently sensible, of course; better to keep your powder dry until you really need it. The Bank did note the housing market appeared to have strengthened and business activity to have picked up, but its overall growth forecast was downgraded to 0.8 per cent and an average of 1.1 per cent over the next three years. It said this year would be the slowest in over a decade. It will be interesting to see the effect the new incumbent has on life there – will we miss the ‘unreliable boyfriend’?

That aside, there has been a wave of more positive stories and reports. Nationwide says annual house price growth has increased by 1.9 per cent, the highest jump since November 2018. Rightmove says asking prices have risen by 2.3 per cent since the election, the largest rise for that period since its surveys began in 2002. Rics reports that new-buyer enquiries in December were at the highest level since January 2016. And UK Finance says mortgage approvals for house purchases have risen to their highest level since August 2015.

My view is this: don’t worry about the things we can’t control. The market will be what the market will be, and all we can do is concentrate on looking after our clients.

Given all the prevailing talk about rate cuts and the like, the markets have reacted and, as a result, three-month Libor has eased to 0.76 per cent while swap rates have crashed before righting themselves a little.

• 2-year money is down 0.12% at 0.66%
• 3-year money is down 0.15% at 0.65%
• 5-year money is down 0.18% at 0.66%
• 10-year money is down 0.22% at 0.73%

In other news, I was lucky enough to be part of a very interesting roundtable with communications consultancy MRM, and one of the questions was about where the industry would be in 10 years’ time. My somewhat facetious retort was that, looking forward 10 years, we would probably have the head of the FCA sitting in front of the Treasury select committee and being asked why they had thought it a good idea to promote execution-only.

Wasting the MMR

I’m not sure where to start with this other than that it seems the excellent work done with regard to the MMR has been left by the wayside. I don’t buy the fact that execution-only is no riskier than an advised mortgage process. Add in the fact that it ‘appears’ that lenders can entice people down the execution-only route by pricing it lower, and you have a whole ream of issues just waiting to come out to play.

Expect a return to shorter-term deals, a decline in offsets, inappropriate mortgage terms leading to borrowers paying thousands of pounds more than they need to, very few part-interest only, part-repayment loans, and a host of other things that clients will miss out on.

As for any lender that wants to go down this route…brokers will give you short shrift.

Also, lenders, and price comparison sites for that matter, need to be careful what they wish for. Any interactive services or recommendations are still captured as advice, and lenders need to be sure that they are not straying over the wrong side of the line; also, that they do not just turn into bland product providers that inspire no brand loyalty at all.

We also have the fact that advisers are required to explain why they have not recommended a cheaper mortgage, which many of us do now anyway, but it will be interesting to see whether our justification is good enough in the new world. Price is not and should not, ever, be everything.

As for brokers, if we just concentrate on doing what we do best, engage our clients, advise, nurture and look after them, they will stay true. Embrace technology rather than fight it and keep shouting from the rooftops until we are hoarse: ‘Brokers are the client’s one true friend.’

Meanwhile, my friends, enjoy the current market. Engage with lenders and work with them because only through real partnership can we all prosper. May this year be for you all a satisfying, successful and healthy one.

Let’s do this…