By the time this is published, we will have had a general election and we’ll know more about what the next five years of government is going to look like. A Tory majority should at least mean (rightly or wrongly depending on your viewpoint), we get to a conclusion on Brexit; a hung-parliament will undoubtedly just cause yet more angst and uncertainty within the population of the UK.
The economic outlook for 2020 is at best “slow” and has been re-forecasted downwards by many compared to predictions at the start of 2019. Although consumers have continued spending well this year, the increased use of unsecured credit to fund purchases is a concern, especially given, in some instances, the lack of any sort of real regulated sales advice when taking the credit out.
I have written before that it is mad that I can buy a £50k car on credit within an hour of entering a showroom whereas a £10k further advance on my property generally takes a minimum of a couple of weeks and involves an advised interview in many cases. I hope, rather than predict, with such an evenly balanced economic outlook that unsecured lending availability is considered by the Regulator in 2020 as it may well be a very significant bubble waiting to burst if we have a downturn.
Conversely, a positive in terms of increased volume over the past couple of years, has been the growth of the later life lending sector, and with an estimated two-thirds of all property wealth sitting in homes owned by over-55s, and more funding continuing to come to market, this sector will only increase next year as the products now become a more mainstream part of retirement planning.
I think 2020 could be a big year for challenger and specialist banks. The number of banking licences being granted has dropped massively, and capital availability to fund new start-ups is not as readily available as it was. Those that successfully launched five or six years ago seem to have timed it right, and I think there will be continued activity in the sector, but potentially with more mergers and acquisitions activity taking place. We have seen a lot of capital spent by some large players on their digital strategies without too much success in some cases, and it would not surprise me if one or two digital “challengers” were bid for to become the digital arms of some mainstream players.
I’ll finish by saying, whatever 2020 throws at us positively or negatively, may the year bring health and prosperity to you all and may I wish you all a very Happy New Year.