Having returned from a week of leave to spend some much-needed time with my family, I am reminded of just how important it is to take time away from work. In many ways, the last 12 months have been challenging and even relentless in places, so I feel lucky to have a great team around me. One which gives me the confidence to step away and switch off.
For others, of course, it is not so easy. There are currently many advisers working around the clock to process applications and help their clients move ahead with their housing ambitions. For these folks, there seems little opportunity to slow down and from my recent conversations it seems we could be in one of the busiest periods on record.
We’ve seen this first-hand at Legal & General Mortgage Club. Our lending records have been smashed since the year began with March and February bringing us our highest and second highest ever lending weeks, respectively, with March ending at over £8.9bn of lending, beating our previous best by some distance.
It’s hard to fully comprehend what’s happening in the market currently but I think it can be summarized in the form of a familiar weather analogy. For now, a perfect combination of high pressure and light winds have led to a real heatwave in the market. And fortunately, it seems these good weather conditions may be set to continue for some time yet.
Some advisers I have spoken with are now so busy that they are – for the first time – having to book appointments over a week in advance. Alongside this, almost every business and network lead I have caught up with recently has ambitious growth plans in place. In many instances, they are also looking to recruit.
I must also take a moment to tip my hat to the many fantastic lenders who, after periods of operational challenges last year, have regained strength. Processing times are significantly improving, and this is naturally helping to reduce some of the congestion in the market.
Will demand remain high?
Purchase activity has been key to demand so far this year and just 17 per cent of our business stemmed from product transfer activity in March – down from 29 per cent in January and 24 per cent in February.
Naturally, the numbers looking to purchase because of the stamp duty holiday will gradually reduce but 2021 is still going to be a bumper year in the refinance market due to more than 700,000 residential fixed-rate mortgage reaching maturity. This should not be overlooked despite new business opportunities.
The latest thinking from Global Data also provides us with a bit of reassurance. In its latest report, it says that outstanding mortgage balances were 3.1 per cent higher in January 2021 than at the same point the year before. It is excellent to see how the market has bounced back and Global Data also predicts the value of residential mortgage lending to grow at a steady pace, reaching £1.7bn in 2025. That is a year-on-year growth rate of close to 3 per cent.
We should remain optimistic about the state of the market in 2021. However, it is also important for us to plan should our good weather climate give way to more stormy weather. Darker clouds could follow next year noting the economic turbulence recently, and if they do roll in, we need to be prepared.
Advisers especially need to look at how they can future proof their businesses to sustain activity in case more ferocious weather is on the horizon. For now, I would urge my peers to take care of themselves. Unwinding lockdown restrictions make it an excellent time to take some much-needed holiday and it can do the world of good, especially during these taxing times.
Legal & General Mortgage Club director Kevin Roberts
