No place to hide for financial services?

These are strange and uncertain times to say the least, and by the time you read this, the whole social fabric of our lives could have changed, especially if the threat of quarantine is now followed through with, which is beginning to look inevitable.

Back to the Budget, and this was undoubtedly a ‘baptism of fire’ for Rishi Sunak although I thought he handled it well, and was no doubt helped by the vast sums of money he was able to ‘give away’. However, less than a week after the Budget one is already wondering whether this will be enough, especially if the virus has a very negative impact on the UK economy.

Central Banks have just this instant co-ordinated a response, and this feels all feels suspiciously like the Credit Crunch period, not in terms of the source of the problems, but certainly in terms of the measures being utilised – interest rate cuts and Quantitative Easing.

What we probably do already know, is that it is the decisions made now and the measures introduced in the days ahead that are going to go a long way in determining how business will cope. And that’s not even considering the inter-twined nature of our own personal health, the ability to continue working, and what this will mean for the UK economy.

England’s Chief Medical Officer said last week it is “likely” the virus will become an epidemic with potentially 80% of the population being infected. During its peak that might mean one-fifth of the UK’s entire workforce will be off sick and it won’t need me to tell you just what this will mean to GDP, productivity, but perhaps more importantly, what it will mean for those who react severely and lose their lives. Significant numbers of deaths are also inevitable.

It's all rather sobering stuff and is of course a far wider and greater problem than what might befall our own workplaces, sector, industry, colleagues and stakeholders. However, we must confront what might befall the sector and how we can best plan and prepare for these circumstances.

It won’t need me to tell you how inter-connected the entire mortgage and housing market is – delays (for whatever reason) in one part of that process/chain can already have a severe impact and this will be ratcheted up greatly if, as is likely, we have large numbers of our industry’s workforce unable to work.

The FCA has already issued a warning to regulated firms to make sure they have contingency plans in place and this perhaps goes double for advisory firms, but also all those involved in mortgage lending. We must all be prepared to have staff members if not exactly off work sick, then perhaps self-isolating or following guidelines not to congregate in large numbers, which may well mean that offices have to be closed.

Are you in a position to keep functioning as a business if your workforce is at home? It’s a great benefit for the mortgage market in that technology can be utilised fully in order to keep on providing advice, processing cases, underwriting mortgages, carrying out conveyancing work, etc, and all businesses will need to ensure that they are fit for purpose in that regard.

Where we might see an impact is at the so-called coal face of the housing market in terms of purchasing. Agents have already anecdotally started to reflect a situation where potential purchasers are not visiting properties to conduct viewings, and the same could be said for surveyors - we must believe that this is likely to impact purchase activity if it continues.

In other words, it’s highly likely that we will all be impacted in some, way, shape and form. We are still near the start of this ‘journey’ but time is running out to get those preparations right and to minimise disruption – as Mark Carney said recently the impact could be significant but it will also be temporary. It’s how well we plan and prepare now that will determine what the ultimate result will be.