We should look forward to 2017 with optimism, with proactive intermediaries grasping opportunities
As we say farewell to a year that has provided more than its fair share of political surprises and regulatory demands, we can look forward to 2017 with some confidence thanks to a robust lending platform. That said, we must also be realistic about the fact challenges remain.
In what should be the last major announcement of 2016, Chancellor Philip Hammond used his first Autumn Statement to reveal the Government has ring-fenced £3.7bn to supply 140,000 new homes by 2020-21 in a bid to tackle the country’s housing supply problem.
While suggesting homebuyers would continue to be supported by schemes such as Help to Buy Equity Loan and the Help to Buy Isa, he emphasised the need to boost supply rather than demand with initiatives aimed at spurring house builders into action.
No quick fixes
It is no secret the supply of affordable housing has been an issue stretching far back beyond 2016. As such, we cannot expect to see any quick-fix solutions over the course of the 2017. What we do need to see, though, is progress.
Shortfalls between rising demand and the supply of new homes have gone unanswered for far too long. It is time this gap closed. Of course, this has not proved easy for any government but let’s hope, for everyone’s sake, 2017 is the year in which we can start to see some real improvement.
Focusing more on the mortgage market, the obvious sector to keep an eye on is buy-to-let. Impending tax relief changes for landlords and the announcement the Bank of England’s Financial Policy Committee has been granted new powers to help it protect the financial system from future risks mean it is likely to never be too far from the headlines.
From early 2017, the FPC will be able to direct the PRA and FCA to require regulated lenders to place limits on buy-to-let lending in relation to loan-to-value and interest coverage ratios.
The consultation on which this decision was based did, however, highlight the positive impact of buy-to-let landlords in the economy and the role they play in widening the overall housing market. Let’s hope this influence continues to be recognised and we see some sensible decisions being made for landlords, lenders and tenants alike.
Meanwhile, opportunities within the remortgage sector will continue to grow. The interest rate cut in August has already encouraged more activity within this sector and if recent research from LMS – which suggested almost a quarter of remortgagors expect rate rises in a year’s time – is anything to go by, even more homeowners will be looking to secure their financial future in the coming months.
It goes without saying first-time buyers will also feature highly on the agenda over the course of 2017. Responsible innovation is required throughout this sector to work in tandem with solutions being sought to bridge the affordable housing supply gap.
And we cannot lay this entirely at the door of the Government. Lenders have to step up in terms of helping to educate first-time buyers on the value attached to some not so alternative solutions.
The year should see lenders, distributors and intermediary partners continuing to work closely together, developing a deeper grasp of the needs of all parties in the mortgage chain. Technology and communication will be at the centre of this and intermediaries should expect a widespread improvement in lenders’ systems and support networks.
All in all, we should look forward to 2017 with much optimism. There will always be influences that remain out of our control but opportunities will continue to present themselves across a number of sectors, and it will be those forward-thinking and proactive intermediaries best placed to grasp them.
Tony Fullbrook is head of mortgage purchases at Barclays Mortgages