Craig Middleton: Sheltering from the storm of uncertainty

Craig Middleton: Sheltering from the storm of uncertainty

Craig Middleton is mortgage sales and distribution manager at Harpenden Building Society

If we think back to just a few months ago, things were looking up. The ‘will we, won’t we’ uncertainty around Brexit was finally over.

The housing market was starting to move, with more houses going on the market and the banks approving more mortgages than they had in years.

Annual house price growth was stronger than it had been for 18 months and the media was reporting on green shoots in the economy.

So much has changed so quickly – and all because of a pathogen mutating on the other side of the world.

None of us know how this is going to play out. We’re all worried about our families, our friends, our work and what the economic fallout may be.

Understandably, people are waiting to see what happens before making major changes in their lives, such as moving house. As the Halifax announced, the UK price recovery is “at the mercy of coronavirus.”

Let’s hope that – as the prime minister has suggested – coronavirus will mean putting our lives on hold for a few months and then things will go back to normal. But even if that is the case, there are still likely to be far-reaching consequences.

For example, there are likely to be far fewer international students coming to UK universities this autumn.

That means fewer students renting student accommodation, which is a blow to buy-to-let landlords who bought property in student areas.

The high street is already struggling, and is likely to be hit once again in university towns where students would usually be out shopping, eating, drinking and socialising.

In short, we have to be prepared for a financial downturn, even if relatively short-lived, which could lead to unemployment, unpaid rent and people struggling to pay existing mortgages or take on new debt.

So, what should mortgage brokers and the industry be doing?

Learn from the past

It’s difficult for brokers, because what we do depends a lot on what happens in the lending sector.

In terms of thinking about how to protect your business in a downturn, a good starting point is to ask how firms and individual brokers survived previous crises – not least the banking crisis of 2008.

One option was to sell more protection products to keep cashflow coming in. But if people are being squeezed financially, are they going to be able to buy new insurance policies?

Look back at how firms survived the last crisis, and you’ll see that high-quality, professional mortgage brokers made it through simply by being very good at what they did and having enough resources to cushion the fall.

If you’re a small business, it’s worth thinking about teaming up with other brokers and – as I proposed in this column in October 2019 – with financial advice companies, which are facing their own set of challenges such as a shortage of both specialist advisers and paraplanners.

When clients are looking to rejig their finances in an era of unpredictable markets, mortgage brokers can contribute a great deal with their knowledge of the housing markets, specialist lending and equity release.

Building your skills could help you stand out from the crowd

Specialist knowledge can also prove invaluable in attracting and keeping clients.

You might want to consider building your skills with more advanced and specialist qualifications.

The LIBF CeMAP Diploma is the next step for mortgage advisers looking to expand their understanding of financial services and the residential lending sector.

This will give you the edge when it comes to advising on more specialist mortgage products like new build and high net worth, as well as protection products.

When you’ve qualified you can use the CeMAP Diploma designation after your name, giving confidence to your clients and your colleagues that you have the skills and specialist knowledge they need.

Or you might find the time to study for that qualification in regulated equity release that you’ve been meaning to do for so long.

It takes an average of six months to complete part-time, so you’ll be ready for when the economy hopefully bounces back.

One thing you should always be doing is keeping on top of your continued professional development.

If you’ve done 15 hours of CPD within the past year and made a commitment to do at least 15 hours this year, you could well be on the way to achieving CeMAP Professional status. It’s easy, too.

You can source your own CPD or, with LIBF, get access to our course website, where you’ll find plenty of resources.

The best thing is that there’s nothing to stop you topping up your CPD or taking another professional qualification, because all the learning is online, and it will stand you in good stead for whatever the future holds.