"In a market which does present these 'up and down’ challenges, it makes it even more important to make the most of those ‘up’ periods and to work as efficiently and effectively as possible within them."
Looking back over recent history, it’s quite startling to think we now have a housing market which seems to work almost totally in tandem with school holidays.
Perhaps it’s always been like this to some extent, but in recent years this combination of kids being off school equalling the market having some of the energy dragged out of it, seems far more acute.
February was a good example of this with different areas of the country having half-term over different weeks, which essentially meant a noticeable drop-off in activity and enquiries over a two-week period as people had ‘better things to do’.
We’re not for one second begrudging kids (or their teachers) their half-term holidays but it does make you much more cognisant of the school holiday periods, with a longer Easter break coming up, followed by another half-term and then we’re in Summer holidays for six weeks-plus.
These peaks and troughs have always been there in a seasonal-affected industry like the mortgage market, but as mentioned, whereas once you might have looked at a Spring or Summer boost as the better weather gives more time to go and look at properties, for example, now you’re looking at five/six-week periods in between school holidays.
In a market which does present these 'up and down’ challenges, it makes it even more important to make the most of those ‘up’ periods and to work as efficiently and effectively as possible within them.
Somewhat ironically, January’s raft of constant product rate changes – even though they were pricing cuts - wasn’t necessarily the most conducive of periods for advisers, not least because the constant tweaking simply ends up requiring far more work for each and every single client application, as we have to keep up with what the best rate/product might actually be right now, not just at the point of the initial advice.
There feels like a lesson for advisers to learn here, in terms of their ability to constantly keep on top of the market during a period when rates are being changed or removed at a frenetic pace and often, at the drop of the proverbial hat.
Consumer Duty might well suggest, even demand, there needs to be a constant process of re-evaluation, re-booking of products, re-contacting clients to make them aware of new rates, etc, but at the same time – as a number of commentators have pointed out – this is still all work just for one application and one procuration fee.
Some might argue that January was slightly more frenetic than other periods because we’d not had a dip in swaps like that for some time, neither had we seen lenders wanting to respond so quickly, not least because it was the start of the year and they wanted to hit 2024 running.
However, looking ahead, if – as seems likely – inflation continues to fall and Andrew Bailey gets one of his own predictions right, then Bank Base Rate will be cut, potentially two or three times during 2024, and swaps will also fall, sending the industry back into a period of further product and rate changes, requiring the same level of resource, commitment and hours to complete a case.
If this coincides with a school holiday, then perhaps the frenetic nature of the market in January won’t be repeated, but we all know these things tend to happen in sudden bursts and advisory firms do not want to be ‘caught short’ by such activity.
Plus, of course, there comes a point in any advisers’ life when you simply can’t work a case to the absolute nth degree, constantly chopping and changing products for the client as rates are pulled almost on a daily basis. In that situation, the client is going to need to pay for the work involved and advisers should have no qualms about having a model which secures them the income they require for the work they’ve carried out.
What is important here is clearly to make the most of any demand boost from rates dropping, but to also recognise how sustainable it is, how and why it might peter out fairly quickly, and to ensure you are resourced appropriately in order to deal with the influx of enquiries that might be generated, and any subsequent drop-off.
We work with our AR firms and advisers to help them manage their workflow and resource in such situations, and it also helps to work with a network where the directors are also going through the same process and are having the same conversations at any one time.
Sharing knowledge and expertise can be a huge benefit of being a network member, and if the market is going to be slightly difficult to call over the short-term, then having a smoother process pathway and being clear on the income you need to generate from the work, will be of great benefit. Regardless of whether the kids are off or not.
