We can come back stronger than before
Harry Hodell is a director at Pure Structured Finance
As once so eloquently put by Mike Tyson, the youngest ever heavyweight world champion boxer, ‘Everybody’s got a plan until they get punched in the face’.
With the vast number of property professionals in the UK enjoying a bullish start to the year it would be a fair assumption that very few of us, if any, could have predicted the situation that we are now faced with.
In these extraordinary times, the market faces a rather new challenge compared to the financial industries’ historic difficulties. In the aftermath of last December and the Brexit conclusion, the beginning of the year brought just about the closest resemblance to some sort of stability in the UK housing market, that we had seen in several months.
The UK property market and its professionals were ready and waiting to make the most of the year ahead.
Certainly from a personal perspective, I enjoyed the start of the years returning confidence to our sector, the increased volume of inquiries and transactions and the continued evolution of debt provider’s products.
This seemed to be echoed across the country with Zoopla reporting its strongest January and February in four years. But then you get punched in the face…
Over these past few weeks, the global pandemic COVID-19 virus has brought forth many unforeseen challenges to our industry and indeed, the worldwide marketplace as a whole.
Already there has been a dramatic decline across international markets and within the UK economy, so it comes as no surprise the property market has felt the backlash of the developing situation.
The very immediate response was somewhat disbelief and hope that the UK would not be affected in the same way our global neighbours had been.
Sat here today with the nationwide lockdown on all non-essential travel and work has once again cascaded our industry with uncertainty.
This has seen the majority of lenders reducing their offering and made the, I’m sure, extremely difficult decision to decline all new applications whilst others have pulled out of new lending altogether.
The construction industry has felt its biggest decline since the financial crisis and we are experiencing record high numbers for unemployment not matched since the 1970s.
There is no doubt that the weeks and perhaps months ahead will be extremely challenging for a majority of those in this industry.
Judging from the actions of countries at a later stage in the defence against coronavirus, the lockdown review on April 13 will be extended until what looks like to be the end of the month, perhaps longer.
At the time of writing, there is some leniency for construction workers/valuers, although it would seem likely that this will be tightened in the coming days.
Whilst there are multiple implications of the virus and the government’s actions to prevent the spread of it, we are also provided the opportunity, albeit challenging, for our alternative specialist lending industry to lay claim to its commercialistic – thinking namesake.
Though struck heavily by this pandemic, alternative finance has blossomed in previous struggles for the ability to recognise opportunities, adapt and provide truly unique lending offerings to the many clients who need it.
I continue to work with specialist lenders who, like I, hold bullish long term views of the market and can offer bespoke solutions to clients.
The ability for them to continue re-modelling their offering during uncertain times and provide clear parameters in which they can operate in installs the understanding and confidence of their ability to deliver.
More so now than ever, the relationships between client, intermediaries, and lenders will be tested so it is good to see that the up-most is being done to attempt to keep all parties informed.
Out of necessity, the industry has had to rely upon technology to remain active, something I’m glad to see and hope we continue to embrace in the future, as it will hold the industry in good stead moving forward. Transparency and working together to problem-solve will provide the platform needed to thrive as more certain times present themselves.
I am confident that once we have conquered this almighty foe that currently stands in front of us, we will have a bounce-back of the UK property industry and fulfill the backlog of increasing applications and opportunities like that, which was experienced in January/February this year.
So despite the somewhat daunting challenge we currently find ourselves up against, we will remain agile and resilient and as time passes and confidence returns, we will come back stronger than before.