If you thought the economic and mortgage market commentary had been particularly noisy recently, I suspect you haven’t heard anything yet, because with the Budget on 28 October and the next Monetary Policy Committee (MPC) meeting following the week after, we’re about to enter another period of predictions, speculation and supposedly expert analysis about what might happen next.

We’ve already seen rumours about potential tax increases for banks, alongside announcements about support for first-time buyers, and you can guarantee that almost every possible Budget measure will be discussed, dissected and presented as though it is practically inevitable before the Chancellor has even stood up to deliver it.
Predictions are not decisions

The same applies to Bank Base Rate (BBR), where we’ve recently had Huw Pill (again) discussing the prospect of multiple increases, albeit questioning expectations of four rises over the coming year, which is interesting given his consistently hawkish position compared with many of his MPC colleagues.

Now, Pill is perfectly entitled to his opinion, but he’s one member of a nine-person Committee, and his views should not automatically be interpreted as an indication of what the MPC collectively intends to do.

Yet imagine being a borrower considering a tracker mortgage and reading headlines suggesting four Bank Rate increases might be coming, because you could quite reasonably conclude that a tracker would be a terrible choice, without appreciating the distinction between market expectations, an individual MPC member’s comments and actual policy decisions.

And while all this speculation about higher rates has been circulating, how many consumers will have noticed that several major mortgage lenders have actually reduced rates on selected products this week? That doesn’t mean rates will continue falling, of course, but it demonstrates how quickly the reality of mortgage pricing can differ from the impression created by the headlines.

THE BUDGET SPECULATION ISN’T HELPING

We should also recognise that speculation surrounding the Budget can have consequences well before any measures are announced, particularly when it involves property taxation or changes which might influence people’s decisions about buying and selling homes.

We’ve seen previously how suggestions of potential stamp duty changes can encourage people to put transactions on hold, because why would somebody proceed today if they believe waiting a few weeks might save them thousands of pounds?

That is precisely why I don’t expect the Chancellor to reveal every detail beforehand, and nor should we demand it, but equally we shouldn’t allow every rumour about bank taxation, housing incentives or wider fiscal measures to become another reason for consumers to assume the worst.

There will undoubtedly be difficult decisions in the Budget, but there may also be positive measures for the housing market, and we should judge what is actually announced rather than what somebody thinks might happen.

ADVICE MUST BE STRONGER THAN THE HEADLINES

This is where I think we as mortgage advisers have a particularly important responsibility, because our clients are being exposed to an enormous amount of commentary, or noise, which can shape their expectations before they’ve even walked through our doors, picked up a phone, or dropped us an email.

Borrowers need to approach those conversations with an open mind, recognising the product they believe is right, or completely wrong, based on what they’ve read might look rather different when assessed against their circumstances.

Equally, advisers must be brave enough to challenge those preconceptions and recommend what they genuinely believe is appropriate, even when that recommendation appears to contradict the prevailing narrative.

A tracker might offer valuable flexibility and competitive pricing for one borrower, while another might be far better served by the certainty of a fixed rate, but neither decision should be dictated by an alarming headline or somebody’s prediction about where BBR might be in six/12/24 months.

Nor should advisers themselves become so influenced by the constant commentary that they lose confidence in their own judgement, particularly when they have access to actual mortgage products, current pricing and a detailed understanding of their clients’ financial circumstances.

KEEP YOUR EYES ON WHAT MATTERS

Over the next few weeks, we’re all going to hear an extraordinary amount about what the Chancellor might announce, what the MPC might decide and where mortgage rates might go next, but the operative word throughout is ‘might’.

Our responsibility is to explain the risks, assess the options and help borrowers make informed decisions based on their circumstances rather than speculation, because that is what professional mortgage advice is supposed to deliver.

We cannot control the headlines or prevent commentators from making predictions, but we can decide how much influence we allow them to have over our recommendations, and I would suggest that being brave enough to drown out the noise is going to be an increasingly important part of doing our jobs properly.

Sebastian Murphy is group director at JLM Mortgage Services, the mortgage and protection network