As is customarily expected at the start of a new year, here are my thoughts on what 2021 holds plus some updates on Enness.
Reflections on last year
2020 ended in a place far from where we expected it from as we started the year and as the pandemic started to unfold. We had vast fears of paralysed property markets, surveyors unable to value and lenders being either unable to or unwilling to lend. Compounded with our worries and predictions, we with everyone expected the worst.
Our doomsday planning was aided significantly, given our experiences from the financial crisis, and we were equipped with valuable experience in dealing with disastrous environments.
We did three things:
- We invested heavily in marketing, business development and client relationship management.
- We focused our team on what was vital and diverted our energy from anything that wasn't.
- Restructured some of our internal processes, corporate infrastructure and adjusted our thinking to the new reality.
As a result, I'm proud (if not a little nervous) to say that Enness really flourished in the second half of 2020 and we are now in the strongest and most organised that we have been since we created the company. Our whole team was incredible throughout the entire year, rallied around, dug in, and pressed hard – resulting in some quite exceptional outcomes for our clients and customers.
We managed to open our Geneva office late in 2020 (it was planned to open in March) which was a result of a considerable effort. We have some big plans for Switzerland and think we can add some real value to its private client community and residents – a great way to end the year.
With this foundation, we are cautiously optimistic for 2021, and we think our position in the global mortgage market will continue to grow in importance.
Here are a few of the things I expect to happen in 2021:
Lenders and lender appetite
2021 will be a year of unprecedented lender flux. I was amazed that so few lenders stopped or limited lending last year – in the main, it stated virtually business as usual across the board except in a few niches or speciality parts of the market.
This year, however, I think there will be much more lender change in lending appetite, lending criteria, and credit availability, which will make finding the right solution much harder.
The 'retail' parts of the mortgage market will become much more challenging to navigate especially in the 'complex' areas. The self-employed, and people who rely on commission or bonuses, will find it harder to get a mortgage, and I think income multiples and 'affordability' will be restricted, meaning many people won't be able to borrow at the levels they need primarily from the mass market lenders.
In contrast, I expect high-value UK and international markets to roar into action because of expectations of prime property value appreciation and the mass change in how people chose to live their lives on a local and international basis.
Huge property market activity once countries open
We have all seen and read about the migration from London living to the countryside, which will likely continue in the short term. However, with prices already starting to become "heady "in some parts of the country and supply and demand beginning to tail off and the end of stamp-duty, I think the countryside revival will fizzle out by the summer.
I expect money to start moving back into the London market, especially (and hopefully) post full vaccine deployment and when the market returns to normal. We have seen some significant early moves from the US, far East and the Middle East before the Brexit agreement. Once the global markets open up, I think pent up demand coupled with opportunity will drive a significant increase in activity.
This bounce in activities as soon as markets open up will be seen in other prime locations. We already see significant interest in finance for purchases in the Balearics Islands, The French Riviera, Portugal and other places, As soon as travel is available and the lending markets thaw, I think there will be some big moves as an extension of the "London to the Country" lifestyle shifts.
Emerging international property markets
The Italian property market maybe this year's winner – huge tax advantages for new incoming residents, significant open properties with lots of space and relatively low values compared to the rest of Europe will drive enquiries from international movers. Now mortgage finance for non-residents is available only at the top of the market. Still, we see the early signs of an increase in mortgage availability from some international banks happening this year.
Austria and Dubai will also be exciting markets to watch for different reasons.
Opportunistic purchases in the distressed and commercial markets
2021 is likely to be a big year for developers and property owners to expand their portfolios as the fallout from the pandemic starts to unfold. There will be an increase in distressed opportunities once the statutory protections end. The planning permission changes will help many develop, extend and generally add value, especially in the commercial city-centre locations. There should also be a substantial increase in the supply of properties to buy.
So, from us – I think it is going to be a busy year. Our market-leading high value mortgage offering, international coverage, problem-solving reputation and talented team mean that we can find credit no matter the circumstances, putting us un an excellent position for another rollercoaster year.
Happy New Year!
Islay
