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I wish I could say the worst is over

Bob Hunt

April 7, 2020

Bob Hunt Paradigm

Bob Hunt is chief executive of Paradigm Mortgage Services

A month ago, my article focused on the appointment of the new Governor of the Bank of England, Andrew Bailey, and whether he was receiving something far less than a glowing recommendation from the Treasury Select Committee as he took up his role.

While clearly one of the most important appointments when it comes to the UK economy and financial services as a sector, I think we’ve probably seen over the last month that reputation counts for very little. It’s action that truly matters.

And action is exactly what we’ve got. The Bank of England, the Treasury, the FCA, and others, moved quickly albeit I know there are obviously people in certain situations, notably directors of limited companies – and there are many advisers in such a position – who still feel like the safety net does not yet extend to them.

The big question is whether anything like total and utterly comprehensive Government support is at all possible in a situation like this? I suspect not and there are undoubtedly going to be business casualties, through no fault of their own.

What we have however seen is a level of support that would have seen utterly unthinkable in any other era. The fact it is a Conservative government doing it, makes these political times even more extraordinary.

Back in January, I wonder whether Rishi Sunak could ever have contemplated what the next few months would hold for him. Similarly, Bailey himself, might have thought he’d be taking on the Governor role in a relatively benign economic environment, albeit one which had the Brexit negotiations front and center throughout 2020.

What a difference a month makes. Now the focus is clearly very different – for many businesses it is a case of survival and nothing else.

When you cannot determine when the COVID-19 crisis might even begin to start healing itself, it’s very difficult to plan and prepare for any kind of future, let alone any sort of pre-virus normality. Normal just doesn’t seem to cut it at present.

Of course, when it comes to those whose health is being severely impacted by the virus, it’s obviously necessary to take our medicine and do all we can to stop its spread. You would, however, not be human if a part of you wasn’t focused on your own livelihood, how you might get through these months ahead, and what that might mean for your business when this period is over.

There is some grim reading to be consumed on that count at the moment. Just this week, Knight Frank predicted a 38% fall in house sales during 2020 as a result of the virus, the lockdown, and the impact this will have on the housing market. That’s a loss of 526,000 sales – it won’t need me to tell you that the income jettisoned as a result of such a fall in transactions would be considerable, not just for advisers but every single other housing market stakeholder.

Purchase activity of course is being impacted not least by the lack of viewings that are taking place, but also in other areas we have to accept activity will suffer as, for example, physical valuations remain off limits, and the appetite and ability of lenders to be active through this period.

Advisers will no doubt be trying to sift through the reams of information that have been heading their way in recent weeks.

We are doing our bit in that regard with both lender and protection matrices available from our website which seek to outline the changes that have taken place as a result of COVID-19 and what that means for both mortgages and protection policies, existing products and any new business that might be written.

I wish I was in a position to say that the worst of this situation is over, but I fear it’s not. Lenders and providers will need to keep reacting to this and ensuring they come out the other side, just as much as advisory firms need to do the same.

What we can perhaps all agree to do is continue working together – we are all connected in this – and try to shape solutions that can collectively take us through this period until things do improve. And remember, extra support, resource and help is available, make sure you seek it out and use it where required. I wish you all the very best of luck


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