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It’s A Question Of Confidence


Damon Albarn once said, “Confidence is a preference for the habitual voyeur of what is known as …”.  What does that mean then? Well I don’t pretend to really know the answer, but the point is we are entering a critical stage where confidence is key.

It is interesting to see that over the past week little changes have taken place, both in the way that some parts of the media are reporting some positive stories, and that some commentators are suggesting that finally we may be over the worst.

I am more cautious, actually I am cautiously optimistic. We have seen this before late last year, and then Lehman’s went down. There is however, more evidence that this time the latest distant specks of light may actually represent the end of the dark tunnel rather than the air vents in the middle.

I am having some interesting discussions at the moment with one of my best clients around certain views that suggest Bank Base Rates may be up at 2% by the end of the year. Why could this happen, especially when rising unemployment has still got some way to go and an election looms large on the horizon?

For a recession to end first we need to see a gradual slowdown in the pace of negative growth and of course the pace of house price falls. It seems we may be on the cusp of seeing this happen, with the pace of decline slowly evening out to possibly 0 by the end of this year.

If this is the case we could begin to come out of the latest malaise by, as many stated originally, the second quarter of next year, and maybe even the first.

I still do not think we will see further massive property price falls like many still suggest. I know we could be seeing a “spring bounce”, but all the evidence we are seeing from Estate Agents and our own enquiry levels, are that people are active again. Yes, unemployment and repossessions will play their part, but there is still a short supply of properties for people to live in.

People still want to move. They still want to get out from under their parents feet, they still want to expand their families, they still separate, they still need to trade down when the family flies the nest.

Mortgage lenders like HSBC and Abbey have tentatively opened up their loan-to-value criteria and word-on-the-street is that people think lending may get slightly more relaxed in the coming months.

If there are signs of improvement by the end of the year then the Bank of England may want a pre-emptive strike and raise rates – and it won’t be by just a quarter here or there.

It comes down to confidence. As Vincent Lombardi said, “Confidence is contagious and so is lack of confidence, and a customer will recognize both.”

So, if we all want to pull out of this sooner rather than later, we need to move forward with confidence, and whilst not appearing naive spread confidence. We have been in this for 18 months now, which in my book means we are over half way through it.

That may be simplistic, but it is what I believe, and I think many others are daring to believe it too.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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