60 seconds with…Paul Smith

CHIEF EXECUTIVE OFFICER, SPICERHAART

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What do you make of the MMR consultation paper?
It seems likely that self-cert, fast-track and possibly interest-only mortgages will be eliminated. Customers are already starved of options, with aspiring first-time buyers unable to get on the housing ladder and home owners trapped on their current deals or unable to move, which is depressing supply. I hope the many submissions in response to the consultation paper will be carefully considered and that any changes to regulation will not further damage an already fragile market.

Is the Financial Services Authority getting it right?
Like many others I am concerned that the regulator will generate unintended consequences from trying to fix what it perceives to be the problem. Meanwhile, a question mark hangs over the replacement for the FSA, how the Bank of England will take up the mantle once its remit is widened to take on some of the FSA’s responsibilities and the effect of the proposed Consumer Protection and Market Authority.

What will be the biggest problem for the market going forward?
Where to start? Falling house prices, a shortage of housing supply and a low level of housing transactions means the housing market is being stifled. All this, coupled with a lack of funding to stimulate lending, a fragile economy, rising unemployment and a lack of professional quality advice due to a rapidly shrinking adviser base, means a lot needs to be done to turn the market around. Unfortunately, I don’t see much good news on the horizon.

what do you see happening house prices?
In the short term I envisage prices remaining broadly static, with regional and localised spikes and dips. It’s important that we look at price

Trends at a local level to get a true picture rather than rely on the national averages presented by house price indices.

Is fraud among solicitors as significant a problem as many are claiming?
The current market has highlighted several issues with lending, valuation and advice practices. Conveyancing and other legal elements play a part in that mix. I expect more lenders to follow the lead of Abbey and Lloyds Banking Group and reduce their solicitor panels.

But professional conveyancing panel managers and high calibre law firms have nothing to fear from this lender reaction as it’s really just a case of sorting the wheat from the chaff.

Interview by Christine Toner