In 2018 the challenger banks will be one year older, potentially better capitalised and more fleeter-footed than the Big Six lenders to react to the ever-shifting political plates.
Kevin Duffy is managing director of MortgageForce
Let's be frank, whatever your political persuasion may be!
Most of our elected politicians are incompetent and self-privileged narcissists who are patently detached from real life.
Or at best, they are over-idealistic Oxbridge graduates whose career paths since graduation started at a political party's central office and haven’t featured a single day's normal graft since.
So forgive my partial apathy and cynicism about parliament's re-sitting and the nauseous sick bucket of soundbites now upon us as the party conference season commences.
We live in a time when as a nation all that we really need (because we actually voted for it folks!) is a fair and reasonable divorce from a bullying and bloated partner.
Bear with me. I will get to the relevances of this for us as mortgage practitioners and lenders etc. very shortly. Especially as despite all the infantile skulduggery and penis-waving going on in the two main parties right now, we could actually all ultimately benefit both professionally and financially from this unholy mess.
Why? Well because the sheer PANIC that is now corroding a rudderless Tory party will possibly prompt an autumn policy reboot which sees us all being thrown some legislative and fiscal bones.
Let's consider the political context to these soothsayered stimulants first, as they explain (but don't necessarily justify) the approaching gratis.
First, the Brexit Divorce Bill. In the words of the inimitable scouse actor Ricky Tomlinson: "we owe you £80bn? My *ss we do!"
Whilst there is no doubt that the Maybot's (pictured) car-wreck of an election has added perhaps £20bn to the severance via a clearly weakened position, it's disappointing that the national press aren't being more forensic in their analysis and reporting.
Did you know for instance that amid the breakage, Britain is actually owed a 16% share of cash reserves tied up in the European Investment Bank – circa £10bn?
Furthermore, in actual LAW, and via all of the relevant written agreements and contracts etc. we will actually owe NO MONEY at all to the EU.
Notwithstanding (and having been divorced 20 years ago myself!) there is still merit in agreeing a sum between £20bn and £40bn which could be fully paid over a two to three transitional period and most importantly ahead of the next election.
i.e. I loved you once (before Maastricht and ever closer blimmin union killed our romance), but it hasn't worked out...
So hey, you keep the house, the dog and that 1974 time share arrangement in Torremolinos we should never have bought... I really don’t mind darling; because in five years' time I’ll admittedly be driving a souped up Ford Mexico and on my third mid-life crisis. But I won’t be picking you up from your botox clinic or being lambasted for getting a tattoo.
Sure, a touch glib, but you get my point. It's not hush money or a commission clawback; it's quite simply Taxi for Britain money. Let's move on. Life's too short to quibble over the odd £10bn.
Especially at a time when (a) the latest manufacturing figures are sparkling, (b) employment is at a record high, and when (c) a leading figure at the Bank of England is suggesting that any perceived economic slowdown since the referendum is premature and possibly even illusory.
Second. And turning from Brussels back to Blighty, there is our fragile minority government.
The Maybot is truly toast. Actually that's not fair... A correction is needed there; the Maybot was toast the second she followed the equally flawed Hillary Clinton's lead in running a campaign characterised by a robotic speaking style and fatigued old policies. Itself underscored by two arrogant central office apparatchiks as generalised in paragraph three above.
You see the irony is most supporters of both the Conservatives and Labour no longer want continuity. They (we?!) want to see a new generation of 'conviction' politicians emerging. (Ruth Davidson in Scotland and Sarah Champion in Rotherham)
May, Davies, Bojo etc. offer nothing new.
And nor does Corbyn incidentally, as those who lived and worked through the 1970's will testify. For even if you discard the dysfunctional Venezuelan parallel, his views on tax, state security (and most adroitly for you the reader) on our lending and financial services architecture would collectively enfeeble this great nation.
So why am I actually feeling agnostic and almost upbeat about all this disorder?
Here's the rub. It's because a combination of utter Tory panic (Corbyn becomes PM after a fudged Brexit...!!*¥÷!!!!), and a now curiously mutualised Tory-Labour manifesto which isoverly-obsessed with 'da youuf vote innit’ will surely now define the policy agendas.
And here’s the order book:
Continuation of one or a variety of the assisted purchase schemes? Tick
Key workers being prioritised (and thereby ensuring that net migration doesn’t falter too badly)? Tick
Public servants' salary caps being neutered? Tick
A long overdue and accelerated bonfire for antiquated planning protocols (btw get on with it Gavin Barwell)? Tick
Rent controls and regulation re-sets which (hopefully) don't simply see landlords passing on the costs to tenants? Tick
More imaginative and radical approaches to development such as building on publicly owned land but selling ONLY the properties, which slashes prices/aids affordability? Tick
Challenger banks and more sensible capital adequacy arrangements continuing to be encouraged? Tick
And breathe. All of which is being hypothesised at a time when we know anecdotally that several of our mainstream lenders are struggling to nail their year-end volume targets – even with the boon of an autumnal spike in product transfers (whether that circa £35bn gets added to the official figures or not!).
And furthermore, in 2018 the challenger banks will be one year older, potentially better capitalised and more fleeter-footed than the Big Six lenders to react to the ever-shifting political plates.
To conclude, this is all guesswork. Wishful thinking, even. But as one American politician once said; "You never want a serious crisis to go to waste". And for us as mortgage brokers I am going to bet that a government very much at odds with both itself and its identity will take this opportunity to finally grasp these nettles, stop soundbiting and actually bloody well legislate.
…And in a fashion which takes the agenda away from both Juncker and Corbyn and places it firmly in the hands of Generation Rent.As cynical and opportunistic so soon after Grenfell as that may doubtless appear to some.
