Oct 15 – Early pantomime season

As the summer tans fade, the party conference season has provided the kind of entertainment usually seen in holiday camps around the UK coast or served up at all inclusive venues around the Mediterranean. The renewed vigour of UKIP, the return of old Labour and the spectre of ten years of Tory rule has brought a new dimension to the landscape.  A straight-talking Jeremy that is not Clarkson is undoubtedly new.

As we try to renegotiate our terms of membership of the European Union, the arguments to fashion the real agenda for the debate have started in earnest.  This now includes not over-engineering financial regulation.  Whilst the real pressing need in the UK is to build more homes, this is already being drowned out by concerns over immigration, the health service and what defence capability we need and can afford.

In my area I have recently seen a number of positive new housing developments being turned down because the County has a plan in place to meet its assessed need.  This is largely through vast scale estate developments, leading to assessments that local infill and brownfield developments to deliver social and affordable housing which gives local people hope are denied.  This cannot be right.

If we are to get close to building a million homes by 2020, then we need to give all in the property chain confidence that there will be more common sense decisions not those based on the issues and solutions of the last century.  We need more vision, creativity and sensitivity to real local needs.  Lord Matthew Taylor speaks a lot of sense on these topics and it has to be hoped that Housing Minister Brandon Lewis and infrastructure Tsar Lord Adonis join him in delivering a new vision for a better built Britain.

We need common sense, which I also see in the mixed messages coming from the MPC members.  I welcome the public debate that there is conflicting data that makes a decision on base rate far from simple.  The world economic slowdown must have an impact.  The lack of inflation in our economy must be taken into account alongside still stagnating wage rates.  The drive towards the living wage will impact but be negated by tax credit changes.  We are still a retail economy with manufacturing still struggling to capture markets.  Rises in their borrowing costs can only be damaging.

So talk of rate decreases shows the range of competing opinions.  A Fed shift may lead us to move to protect sterling, or a move up to give space for positive action later.  Also the Governor may speak to correct market exuberance without needing to actually act.  I like a system that can control markets without taking action, but we in mortgages need to take a wider view and not get sucked in to commenting on every piece of rhetoric. I am moving towards late 2016 being the first actual upward movement.

Finally we all need to learn that we now have governments that talks gently but acts tough.   The changes to pensions occurred because the Life companies did not listen to the messages to change their charging, so annuities were finally given less control over the market.  We are being warned not to let buy-to-let get too exuberant.  A shot across the bows from the Chancellor has already been fired.  If we live in denial then what is a large part of the market today might suddenly look very different.  I for one do not think we need to see tough action, but we have been warned.