It will be apparent to almost all mortgage market stakeholders that the last 24 months have been challenging.
Two years ago, post min-Budget, we were all attempting to deal with a significant spike in mortgage product rates, plus a huge retreat from the market in general, with many lenders pulling large numbers of their products, unsure of what the future might bring.
Those borrowers, and their advisers, who had the unfortunate timing of needing to remortgage at that time would have found a market which was looking a lot like the ‘bare bones’ with high prices to match the scarcity.
Since then it has been a long, slow move back towards positivity, with some obvious bumps along the way, not least in terms of continued high rates, but also a large increase in inflation fuelled by both domestic and international factors.
However, and without possibly being able to know what could be coming over the horizon, it does seem – touch wood – that the mortgage market is in a very different place to that which has often been the norm since those Autumn 2022 days.
For a start, we have had our first Bank Base Rate (BBR) cut, with the potential for more to follow both during the rest of 2024 and in 2025.
Swap rates have responded and, just last week, Rightmove’s weekly mortgage tracker was able to show that – apart from 95% loan-to-value (LTV) – rates below 5% were available across all other deposit/equity sizes.
‘Best Buy’ rates for these below-95% LTVs are now all below 5%, and given the price war which appears to be hotting up amongst almost all the major, mainstream lenders, we might anticipate that more falls are to come.
Especially if we do get an anticipated BBR cut at either the November or December MPC meetings.
And, in terms of product choice, it’s obvious that we are now a long way removed from those dark days of late 2022.
According to Twenty7tec, mortgage deals provided by the 120 lenders active in its platform numbered 23,935 in September, up 4.9% on August, and meaning we have reached a high not seen since before the first lockdown in March 2020.
Clearly a four and a half year high in product availability is nothing to be sniffed at, and the more choice afforded to advisers gives them options to offer the widest variety of mortgages to clients, particularly at lower rates than have been achievable throughout most of this year at least.
As mentioned, that is particularly important for existing borrowers who are coming up to renewal points with their mortgage.
We’re all acutely aware of how dominant product transfers (PTs) have been in the last few years, as rates remained very high and affordability provide a constant barrier for those who wanted to remortgage to another lender but couldn’t make the numbers work.
The options for such borrowers were constrained to a PT with the existing lender, which can often seem like an easy option but advisers would clearly want the choice of being able to move an existing borrower elsewhere, not least for the full procuration fee it offers, but also the fact it opens up a much fuller conversation around wants/needs/changed circumstances, which allows you to explore a whole host of other product options.
A full remortgage to another lender provides the above in spades, and clearly when you have greater competition amongst lenders, more product choice and lower rates, then you can make a greater case for activity in other ancillary areas.
Perhaps topping up the protection cover with any monthly mortgage payment saving, or looking at GI cover, or indeed, providing conveyancing advice to ensure the client has legal representation and they are working with a conveyancing specialist?
These remortgage conveyancing options are also benefiting from lower pricing and, crucially, fixed-fee products which means there are no extra costs to consider later down the line.
At Broker Conveyancing, we offer £245/£350/£500 fixed-fee remortgage conveyancing products which can all deliver significant referral income to the broker, and of course provide peace of mind in terms of meeting the service offered and meeting completion dates.
Overall, as we look ahead to the rest of the year and indeed 2025, it’s possible to see a much more positive mortgage market environment developing, particularly for remortgage borrowers and their advisers’ ability to secure this business, earn income from it and make the most of the additional wants and needs to grow the bottom line from other sources.
Let’s hope it continues for some time to come.
Mark Tosetti is chief executive officer of Broker Conveyancing
