A cartographer’s job has been made easier with the advent of satellite imaging. Maps have become minutely accurate, which in turn makes them more reliable. Not so for the rest of us for whom past experience, industry knowledge and maybe the odd economist’s insight are the only ways to navigate our way around the constantly changing financial landscape.
We would all like to have a precise picture, to see exactly where we are going and how we will get there, but it’s just not possible when the ground is constantly shifting. At the moment there is the possibility that the UK will vote to leave the EU in June, or, conversely, the prospect that it will remain as it is. As with any political uncertainty this is causing consternation within the industry. Yet again we have a bump in the road, which may have an impact on what has been a steady upward path in the last 12 to 18 months. Add to this the recent budget announcements, and the changes to stamp duty, and it becomes even more difficult to predict which way things will go.
One of the ways the ASTL tries to predict what might happen is to ask members to use their experience and, quite often, gut instinct, in order to tell us how they are feeling about the future of bridging and the economy as a whole.
In our most recent survey members were asked what they thought about the future of the UK economy after the budget; if they felt Brexit uncertainty would affect the bridging market; whether SDLT changes would affect house prices; and, if they thought their own businesses and bridging in general would continue to grow this year.
This might not be the most scientific way to try to predict the future. Nevertheless, it does show where our members have the most concerns and where they are most positive. This gives us an idea of where we could concentrate our efforts to try to overcome concerns and take advantage of opportunities. Although we can’t accurately predict the future, we might be able to influence it.
Lenders in particular have the ability to influence by innovating. There are many different uses for short-term finance in the current market and many situations when it is more appropriate than other forms of lending. By innovating, giving more choice, better service and clarity to potential borrowers, we open up the market and keep it moving. Historically, whenever there is uncertainty there are always those looking to make the most of every opportunity.
Interestingly, one thing that our survey did show was that most members (90%) believed that their own business volumes would increase over the next year.
At the same time, 71% thought that the bridging market would continue to grow. This confidence is reflected in the number of new entrants to the market in the last year and the current competitive interest rates.
So, despite there being obvious uncertainty, members are still broadly positive.
Unfortunately, there’s no satellite to show where the next peak or trough will appear for the short-term lending industry but one thing is certain, change is always just around the corner and we always adapt as a result.
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