Mortgage lenders pricing themselves out of the market?

Lenders raising their rates and pricing themselves out of the market are increasing the pressure on borrowers and causing further uncertainty, according to Lichelle Samra, from MPowered Mortgages.

Amid the challenges facing the mortgage market, it’s more important than ever to seek brokers’ advice, believes Samra (pictured), who is key account manager for the fintech lender.

“The mortgage market is currently in a state of flux, which has, for some time, caused confusion for buyers who are hesitant on making their purchase, waiting to see what happens next before they commit,” said Samra.

“Stabilising house prices and a reduction of inflation are providing some relief, but even considering this, lenders continue to price themselves out of the market, causing further uncertainty for customers and have brokers scurrying to get the deals over the line before rates are pulled.”

The mortgage market faces significant hurdles with affordability pressures, considered Samra, as incomes fail to align with rising costs.

“The lack of affordable housing compounds the issue, leaving many priced out of homeownership,” she noted. “Lenders raising mortgage rates in response to economic uncertainty exacerbates the burden on borrowers The ongoing cost-of-living crisis further squeezes finances, making high mortgage costs increasingly difficult to manage.

“While some buyers may be waiting to see what happens, it’s crucial to seek brokers’ expertise now more than ever. The average rate on two and five-year fixed mortgages has risen, but a potential base rate fall could bring changes, prompting those buyers to make their move now.

“Amid this volatility, MPowered has not only held its position in the market while other lenders have priced out but has also recently reduced rates to offer competitive options and will continue to support the market.”

How will the mortgage market look in 12 months?

Longer-term, Samra anticipates ongoing challenges but expects to see potential opportunities emerging in 12 months’ time.

“While swap rates have been volatile, I see a modest recovery in 2025, supported by steadier economic growth and further efforts by the Bank of England to manage inflation,” she predicted.

“Given the cost-of-living crisis, higher interest rates and fear of higher mortgage costs, I see those hesitant buyers making their long-awaited purchases, increasing activity with brokers and lenders alike, and increasing their market share.

“In 2025, lenders must navigate these headwinds while investing in resources to meet evolving customer needs. Despite current uncertainties, a rebound is anticipated as market conditions stabilise. The resilient industry remains focused on supporting homeownership through responsible lending practices.”

Samra wants politicians to demonstrate their commitment to supporting the housing market and first-time buyers.

“I’d like to see support from the government for the housing market following the general election; however, this may take us to the end of 2025 to see,” she told Mortgage Introducer.

“It’s time for a long-term plan that delivers tangible results, fostering trust and confidence among industry experts and the public. Quick wins have helped those in No10 in the short term for support in office but do not address sustainability, thus creating uncertainty and posing the question: What happens when these quick wins end?

“A robust housing strategy should prioritise the construction of new homes while enabling affordability for those seeking to get on the property ladder, who don’t have access to the bank of Mum and Dad. In short, we need a clear and defined long-term plan with fixed policies that promote stability, growth, and accessibility within the housing sector.”

Backed by industry leaders Citi, Barclays and M&G, MPowered Mortgages provides what it describes as a fully digital, trackable application process, that gives a certain decision within hours.

As its key account manager, Samra believes that cultivating strong relationships within the industry is paramount, and considers that a robust network of trusted lenders and partners is essential for every successful mortgage broker.

“Reputations are built upon a foundation of professionalism, integrity, and an unwavering commitment to delivering exceptional service, which have proven challenging in recent times due to market influence,” she noted. “However, in an ever-evolving financial climate, I need to remain a steadfast pillar of support for my broker network, empowering us to achieve remarkable customer outcomes.”

Read more: MPowered Mortgages has new broker channel

How can mortgage brokers achieve more?

To achieve more in the year ahead, Samra believes brokers should get back to basics, and “embrace cross-pollination” to expand their reach and business services, while continuously upskilling to offer what she calls “unparalleled expertise”.

“Extend your sphere of influence via an active social media presence that spotlights your value proposition,” she suggested. “Stay abreast of lender criteria and product developments to position yourself as an invaluable resource.

“Adapt with intention – we all need the capacity to adapt, which is not about reacting to changes as they occur. It’s about anticipating change, planning for it, and leveraging it for growth.”

She added that the broker community should seize opportunities amid fluctuating economic conditions and not be afraid to try new ways to streamline their businesses and services.

Samra has several decades of experience in the banking and finance industry and has previously worked for NatWest Group as business development manager and mortgage manager at Prosperity Wealth. She recently took up her latest position at MPowered Mortgages, a business which she sees as challenging the status quo.

“We’re not trying to reinvent the wheel, but instead simplifying it with our cutting-edge AI technology, making it faster and more efficient for intermediaries to do business and adding value through our enhanced tools which can support their business,” she explained.

And what one business lesson from her career would Samra share with her industry colleagues?     

“One key lesson for success is never to stop learning and growing,” she said. “Embrace challenges, seek knowledge, and continuously evolve. Success lies in the relentless pursuit of self-improvement and adaptability.”