These brokers say they are focused on remortgages and product transfers for now
Four leading mortgage specialists say business in the year ahead will be dominated by remortgages, product transfers – and a mortgage market revival on the horizon.
An estimated 57% of all mortgage products in the UK were fixed-rate products as of 2021, when average interest rates were below 2%, according to government data. Now many of these loans are coming up for renewal in 2023.
Intermediaries find themselves in a volatile market, as Bank of England rates continue to raise the base rate while competing lenders are pushing market rates downward.
An estimated 1.4 million households in the UK will need to remortgage their fixed rate products in 2023, according to the Office for National Statistics.
Kylie-Ann Gatecliffe: Remortgage deals and the return of first-time buyers
Kylie-Ann Gatecliffe (pictured), director at KAG Financial believes that this will be the year of the remortgage.
“We have already kicked off the year with a large amount of clients wanting to review their remortgage options,” she said.
However, she also thinks that first-time buyers will still be a big part of the market through the year.
“Aside from the doom and gloom the media keep repeating, many first-time buyers are still keen to buy, especially those that are renting and are seeing gargantuan rental increases,” she added.
With the market calming down, Gatecliffe said it is a perfect time for those who were constantly getting outbid previously in a hectic market.
She said that first-time buyers are also having more time to view several properties and consider their offers properly, rather than rushing in with the highest offer.
“Yes interest rates are higher, but a saving on the purchase price is definitely one way to soften the blow,” she said.
Mike Staton: Mortgage product transfers a necessity
Mike Staton, director at Staton Mortgages, said he expects intermediaries to spend much of 2023 working on product transfers for customers.
“Many clients will be unable to move lenders during the cost-of-living crisis due to affordability shortfalls,” he said.
As a direct result of this, Staton believes homeowners will be forced down the product transfer route when they reach the conclusion of their deals.
He also expects to see more people with adverse credit after the financial fallout from lockdowns, meaning they will be unable to switch to a more attractive lender.
“The good news is a lot of high street lenders offer better product transfer rates through brokers rather than directly in-house, therefore you really need to be speaking to a good local mortgage broker,” Staton said.
Samuel Mather-Holgate: Mortgage market resurgence ahead
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, believes the first half of the year will be dominated by a lack of confidence in the market and that remortgages will make up the majority of lending being written.
“However, the second half of the year, once rates start to reverse, will see more first-time buyer activity and a resurgence of the specialist lending sector,” said Mather-Holgate.
This week saw the first availability of fixed-rate mortgages under 4% for the first time in five months, according to Moneyfacts.
Lewis Shaw: Debt consolidation mortgages will be a lifeline for some
Lewis Shaw, owner and mortgage broker at Riverside Mortgages, believes that 2023 will be the year of debt consolidation.
“The data tells us that thousands of households are saddled with unsecured debt – and a lot of equity thanks to house price inflation over the past five years,” he said.
With inflation still running high, he believes the only way for many people to make ends meet when they are due to remortgage will be to free up some much-needed disposable income by consolidating debt into a new mortgage.
“It will not be appropriate for some, but for others it will be a lifeline to keep their heads above water,” he said.
What do you expect to dominate intermediary business in 2023? Let us know in the comments below.
