How a Brexit could affect the housing market, new solutions to complement lenders’ use of AVMs, and an ability to make sand sculptures to order
There has been a lot of talk about how the housing market would be affected should the UK leave the EU. What are your thoughts?
If we were to exit, the greatest impact would be on market sentiment, which would have an immediate effect on housing turnover with a knock-on impact for mortgage lending.
Given that housing supply in the UK remains tight, a sudden change in demand for housing could feed quickly into achievable house prices, which could result in some modest and localised price falls – similar to the current scenario in central London, where sales volumes are falling but many sellers do not need to sell.
The greatest impact of an exit would be on market volumes as buyers adopt a wait-and-see approach.
What else is on the horizon that could affect the housing market?
Aside from some major global shock, the greatest challenges for the housing market are an increase in interest rates and the impacts of various policy changes, which cover many areas of the market, not just buy-to-let.
An increase in interest rates may move closer into view should there be a vote to remain and a rebound in business and consumer confidence. The markets are not forecasting any material increase in interest rates but when it arrives it will impact affordability and activity levels.
The market continues to face challenges from the raft of new policy measures facing the housing market, not just those that are focused on the investor market. Starter homes and the push to build more homes of all tenures with more shared ownership will create challenges in the new-build market and extra pressure on lenders to support what may be seen as more niche segments of the mortgage sector.
What do you think is the outlook for the buy-to-let market following recent intervention by policymakers?
With the rush to beat the SDLT hike behind us, we will start to see new investment level out as private investors consolidate their portfolios and adjust to tighter lending criteria.
The result will be a much slower rate of net growth in rental supply as landlords re-size their portfolios to manage their new tax liabilities – particularly in low-yielding markets. While investing in property will remain an attractive option for many, it seems much of the Government’s work in this area is intended to make it less of a ‘no-brainer’ and tip the balance a little towards first-time buyers.
Concerns remain, though. In the near term we will have to see what happens once interest rates rise or funding costs increase.
That said, Mr Carney seems to be making it clear the UK economy won’t warrant a rate rise for some time.
What does Hometrack have up its sleeve for the coming 12 months?
Lenders face a number of challenges, as we all know – among them the need to improve efficiency and customer experience, reduce cost, manage the regulatory burden and grow their books in an increasingly static housing market.
With the delivery in 2003 of the AVM, Hometrack anticipated lenders’ needs at the time and presented a solution that could really make a difference. We propose more of the same over the next 12 months.
Our new solutions will help lenders address the current challenges. These will include rolling out risk analytics and desktop valuation solutions to complement most lenders’ use of AVMs for origination and back-book valuation, while enhancing the experience they are able to offer to their customers.
If you were not in your current role, what would you like to be doing?
Working in a bank, running a data, advisory or property development business, or maybe working as a barista in my own specialist café in Auckland, producing the world’s best coffee.
As a child, what did you want to do when you grew up?
Play rugby for the Bath and England teams. The combination of injury and far more gifted peers proved a challenge in realising that ambition, although I am privileged to have played on the same teams as some truly exceptional players.
Do you have any secret talents?
Making sand sculptures to order for my kids: a relatively simple talent to acquire, aided by the gift of four children and way too much time on overclouded Cornwall beaches with the family.
What is the best advice you have received?
No matter what you choose to do, do it to the best of your ability and never give up.
Who is your all-time hero and why?
My mother, who overcame the prejudices of her generation to become a doctor, while being a supportive wife and loving mother.
Year established: 1999
Headcount: 55+ in UK and Australia
Address: Hometrack Europe
Design Centre East
London SW10 0XF
Tel: 020 3744 0410
Hometrack is a provider of automated valuation model technology in the UK and Australia, which provides fast and accurate market insight that informs critical decisions on whether to lend, the value of land and how to optimise assets to the residential property industry.