Entering Q2 was traditionally a signal for the housing market floodgates to open thanks to purchase activity rising and a seasonal uplift in remortgage business. Although, it’s fair to say that the past few years have been anything but traditional or even typical.
Due to the nationwide lockdown in Q2 2020, this period saw the biggest increase in household savings since records began with the households saving rate increasing to 29.1%.
After a short, sharp ‘closure’ of the housing market, this swiftly bounced due to many people reassessing their property-related requirements, bolstered by a heady mix of a Stamp Duty holiday and rising pent-up demand.
The force of this recovery gave rise to some of the most hectic mortgage market conditions ever experienced and quickly merged some of the more conventional homebuying and selling seasons into one.
These buoyant conditions continued until the onset of the Ukraine conflict in early 2022, subsequent economic headwinds and a disastrous mini-Budget later in the year which served to severely blow these volumes off course.
Following a transactional lull, we are arguably seeing the housing and mortgage market return to some semblance of the ‘normality’ experienced prior to these significant global events and there are some positive signs in the offing.
Affordability levels are improving. The latest ONS statistics showed that, in 2023, full-time employees in England could expect to spend around 8.3-times their annual earnings buying a home. The equivalent figure in Wales is 6.1-times their annual earnings. At the national level, these ratios are similar to 2022, and represent a return to the pre-coronavirus pandemic trend after a large increase between 2020 and 2021.
Remortgaging is also becoming more attractive and viable for homeowners. Although remortgage instructions fell by 13% in February and 31% less remortgages completed during the month, pipeline cases were reported to have increased by 4% month-on-month amidst a more stable rate environment. This is according to the latest figures from LMS, which added that – due to a positive start to the year – mortgage rates are currently lower than they were a year ago, leading to a further boost to consumer sentiment. Nine out of 12 regions across the UK have witnessed decreases in their average remortgage amounts, suggesting a trend towards stabilisation and recovery in the mortgage industry leading into Q2.
With stabilisation and recovery firmly in mind, it’s vital for intermediary firms to focus on their customer retention strategies to cement existing business volumes and explore new revenue generating opportunities over the next few quarters and beyond.
Technology can help with much of the heavy lifting involved with these processes, especially when it comes to tracking maturing products and in helping to ensure that the right type of communications reach the right clients at the right time.
At the heart of this is utilising a CRM system which can help intermediary firms to better manage their customer data, offer stronger sales support, deliver actionable insights, integrate with social media and facilitate team communication. And also in terms of supporting lender integration, audit trails, AVMs and credit searches to reduce admin burdens.
Q2 2024 represents the perfect time to flick the tech switch if firms haven’t already done so. Or, for those that may already have a CRM solution in place, it’s also the time to ask whether existing systems are successfully delivering all the above features in a cost-effective manner. Because if it’s not, then there are systems out there which certainly can.
Melanie Spencer is business partnership and growth director at One Mortgage System (OMS)
