It is always interesting for me to get feedback on some of the things I write, positive or negative, and often the most interesting part of any article is not the article itself, but the comments section. This comments section is a fantastic development that enables everyone to have their say and allows the writer or contributor to gauge opinion and sometimes some very valuable pointers for the future.
Of course there are also the rants, usually from anonymous individuals who can’t spell, that don’t really help anyone, but sometimes there is a point that needs clarification, as now.
A couple of weeks ago I did something for BBC Online, http://www.bbc.co.uk/news/business-12704172 where I answered various questions from those who wanted some mortgage assistance. It was a lot of work but enjoyable and good to do, especially as I feel passionate about the fact that too many people enter into a mortgage without taking proper advice.
A few days later I received the following from our website enquiry form :-
Subject: Saw you commenting on a BBC article, and was astonished at Question 6:
Why not simply state that houses are ridiculously overpriced at the moment, hence the requirement for decent deposits? Oh, thats because you have a vested interest in propping up the bubble. Good luck in the next few years.
Now of course everyone is entitled to their opinion, as am I by the way, so I thought I should answer the point directly. It is one that I have heard levelled at fellow commentators, that we have a vested interest in keeping property prices high. This is a very naive statement.
As a mortgage broker, the one thing we want above all is more transactions. High property prices do not generally help this. Brokers would much rather have a fluid property market, where houses are affordable and in plentiful supply. A market where people are priced out of stepping onto the property ladder means that transactions fall, which is the opposite of what we want. The more transactions, the more advice we can give, the more mortgages we recommend, the busier we are and of course the more money we make.
To say brokers have an interest in keeping prices high is ludicrous.
One argument I have heard is high property prices mean brokers earn higher commissions. How? When property prices are high many first-time buyers are squeezed out, which means, as we are seeing especially in London now, that there are many cash buyers coming into the market, which means fewer mortgages, which mean less commission. In any case, many professional brokers work on a fee basis and the days of the commission only cowboys chasing the highest procuration fees are thankfully behind us.
There will of course be some who will probably lambast my argument, or state “where do they get these ‘experts’ from?”. Most usually on websites such as housepricecrash.com that seem to be a breeding ground for conspiracy theorists, unfairly hammering people just for putting out their views when asked – as witnessed by a shameful campaign against Ray Boulger a few months ago.
So for the record, I believe my views are as valid as everyone else’s, especially as I am a fully qualified advisor who still sees clients as part of my day job rather than just a spokesperson. I would like to see a sensibly priced housing market, one that is robust and avoids the booms and busts of previous cycles. I want to see a high level of transactions and ensure that everyone who takes out the biggest loan they are ever likely to has access to full independent advice, in fact I believe it should be mandatory.
I do not however, believe that property is ludicrously overpriced at the moment, especially in certain areas. Supply and demand is the one economic theory that I believe always holds true and, at present, supply of decent property is at a premium.
The main issue is not brokers, or even estate agents who will probably tell you the same thing, but with vendors themselves. They still believe that their property is worth higher prices and refuse to consider lower offers. Thus there is a gap between buyers and vendors that is not being closed.
Even with this, I believe that anyone buying the right property now will look back in 5 or 10 years time and see that they bought well.
There will be many who disagree with me and healthy debate should be encouraged, but let’s keep the arguments constructive rather than personal.
Anyway, keep the comments coming, positive or negative I am happy to be challenged and I have never said that I am absolutely right all the time. What I do say, is that my views are honest and honed from my own experiences talking to clients, lenders and estate agents.
Have faith, the majority in the property industry passionately believe in what they are doing – ultimately helping the consumer.