Advisers can boost confidence
Rob Clifford is chief executive of Century 21 UK
I was an avid watcher of the Commonwealth Games and was pleasantly surprised at the success enjoyed by all the home nations. It would seem that the ‘home’ advantage that comes with any major event being held on these shores does embolden all the teams and the final medal board appears to be a reflection of this.
I heard a number of commentators reflecting on why teams tend to do better when they’re playing at ‘home’ and much has been made of the crowd support, the fact that the competitors were more comfortable in their surroundings and the extra incentive this gives individuals to want to do well.
To my mind, this appears to be a confidence issue – as we all know many great sporting individuals seem to have ability in spades but this somehow doesn’t translate into reaching great sporting heights. Add in a huge dollop of confidence however and performance levels can often go through the roof.
Confidence in any field can be game-changing and empowering but a lack of confidence can often seem unduly debilitating. This is particularly the case for the UK housing market which has occasionally veered from over-confidence and genuine ebullience to deep concern and, to mis-quote D:Ream, ‘Things might never get better’.
Looking at the results of Halifax’s recent Confidence tracker the lender describes this quarter’s survey as suggesting ‘a tipping point’ for the market with confidence dropping however look beyond the headlines at the MORI results produced for Halifax and the UK-wide outcome for the key question, ‘Is this a good time to buy?’ is more positive than it is negative (47% compared to 42%); in essence more folk believe it’s still a good time to buy and even more see it as a great time to sell.
This particular survey also showed consistent positivity in terms of house price outlook, a stable consumer view month-on-month since September and one which has grown since early 2011. All good signs.
The split between potential buyer and potential seller sentiment is the thing which has created over-zealous headlines.
Clearly, many buyers are considering the latest data on rising house prices, the level of deposit required and the anticipation of higher rates, and perhaps deciding that they may need to wait a little longer.
Sellers, on the other hand, benefiting from rising prices appear to believe that ‘cashing in’ now on these increases may be the best option: but that’s a market phenomenon which has forever existed and is not new to today’s marketplace.
Where this particular survey from Halifax is useful is the insight it gives to regional differences, though if I tell you that buyers are more likely to think now is a good time to buy in areas where house price growth has been relatively modest, whereas in areas like London and the South East buyer confidence is lower, you won’t regard it as the most insightful thing you’ve ever read.
And if we were looking for continued confidence regarding activity in the housing market then we perhaps need look no further than the latest Bank of England mortgage approval numbers which rose 8% month-on-month in June to 67,196.
This was the first rise in five months and shows lenders regaining their momentum and appetite to lend following the deliberate deceleration as they accommodatedthe MMR changes.
A lack of ‘equilibrium’ can of coursecreate issues for the housing market, but, in my opinion, they won’t result in a significant discontinuity.
In fact, I suspect many potential buyers might be pleasantly surprised if they were to examine in detail the amount of mortgage they could secure and the properties in their price range.
London is a peculiar market and virtually always plays out somewhat differently but let’s not talk ourselves into this being a truly national issue.
The Halifax confidence ‘statistic’ is based upon a survey of 1,966 people and was quoted vary widely by the national media – yet bear in mind that there are over 100,000 transactions every single month: hardly a sign of abating consumer confidence.
Advisers can help to bridge any perceived ‘confidence gap’ by laying out all the available options particularly to buyers who might be confused about whether now is the right time, especially given the headline writers love to focus on a negative snippet. Especially when out of context.