With inflation and mortgage rates edging down continuously in the fourth quarter, and the base rate potentially having peaked, Newspage asked a selection of brokers, conveyancers and specialist mortgage recruiters how busy they have been as 2023 draws to a close — and what they are expecting in 2024.
The consensus was that next year is shaping up to be a better year than this.
Rhys Schofield, brand director at Peak Mortgages and Protection, said 2024 could see a lot of pent-up demand feed through into the market.
He said: “2023 has been pretty steady, but 2024 is looking a lot more promising.
“We have now written the same number of mortgages four months in a row.
“Here at the coalface, it feels that there is a lot of pent-up demand for a rip-roaring start to 2024.
“Estate agents have properties to sell, and customers are once again being pleasantly surprised by rates as they continue to improve.”
Expectations of a rip-roaring start were confirmed by Marcus Nanson, managing director at Southampton-based financial services recruiter, NRG Resourcing: “From a recruitment perspective, we have seen a massive increase in activity in the brokerage space during the final three months of the year, as businesses look to build their teams ahead of a potentially busy first quarter.
“As rates have continued to edge down for some time now, I think we can all sense the ‘green shoots of hope’ going into 2024 and businesses have quickly realised they will need to bolster their teams to keep customer service levels from dropping.
“I think consumers have now adjusted to the new normal in rates, and with less volatility in rates and inflation, the brokers we work with are seeing a much higher increase in enquiries, which bodes well for 2024 and hopefully beyond.”
Chris Barry, director at property law firm Thomas Legal, also said activity levels have been picking up, but warned there were still potential bumps in the road ahead.
He added: “The last quarter of 2023 has definitely seen an increase in buyers coming to market, which has helped shift the rising stock levels seen in the prior quarter.
“We see this momentum carrying into Q1 2024 and possibly into Q2, however there are two lurking storms on the horizon.
“Inflation is almost certainly going to rise again due to wage growth and the inevitable catch-up of housing cost data.
“Also, history dictates that during General Election years the property market quietens down in the run-up to the poll, followed by a rush depending on the result. It’s going to be a wild year.”
Meanwhile, it has been a busy December for Elliott Benson, owner of Leeds-based broker Sett Mortgages.
He said: “By the end of this week I will have done the same number of mortgages as the entirety of last December.
“Enquiries are much higher than this time last year and I get the feeling January will be a really hectic month as people realise that fixed rates are falling and there hasn’t been the apocalyptic market crash that some predicted.
“We are taking on another broker and plan to develop the team with a second and another apprentice as we expect 2024 to be massive.
“Hiring in mortgages is extremely difficult: it takes a long time to find the right candidate.
“This is not due to finding candidates with the necessary qualifications as they can be whizzed through in about six months but finding people with the right aptitude and attitude to handle clients and business in the right way.”
Justin Moy, managing director at Chelmsford-based broker EHF Mortgages, added: “We have definitely seen more enquiries for home purchases and remortgages over the past few months, given improved mortgage rates and a good number of people looking to take advantage of a buyers’ market.
“Early 2024, I would expect to be busier, given the number of borrowers coming off cheap mortgage rates in 2024 and the broader improvement in buyer sentiment.
“Increasing the size of our team would be ideal next year, however finding suitable candidates is a difficult task and I don’t see that improving quickly.
“Unfortunately, the opportunity to bring in new advisers without Competent Status (CAS) is expensive and quite a stretch on resources, so we will need to look for those more experienced advisers looking for a fresh challenge.”
According to Steven Morris, director at the Bristol-based broker Advantage Financial Solutions, transactions were limited to an extent during 2023 because people were expecting rates to fall to unrealistic levels, but that particular penny has now dropped.
He said: “For many brokers, 2023 saw clients waiting for the return of sub-3% interest rates, like Doc Brown in a Delorean.
“But this time the Delorean didn’t have a Flux Capacitator and the rates didn’t come back. November suggested people are now coming to terms with the new normal and was a record month for us.
“We submitted the highest number of applications and highest income value since we started. However, I believe this is due to client profile: ours always was, is and continues to be increasingly quirky.
“2024 will be divisive for mortgage brokers in my opinion. Some will clean up, others will suffer.
“It feels harsh to say, but many brokers earned an artificially good crust during the Stamp Duty boom times, charging decent fees for simple business.
“Brokers prospering in 2024 will be those providing value for money, namely technical expertise and extremely dedicated service.
“Being ‘OK’ but charging the market standard £500 fee will not cut it in 2024.”
Reflecting on 2023, Craig Fish, director at London-based broker Lodestone Mortgages & Protection, said many brokers will be glad to see the back of 2023.
He added: “It certainly looks and feels like things are slowly improving as we head into 2024, with more enquiries landing on our desks, but people still need time to adapt to the new norm of a higher interest rate environment.
“2024 looks set to be an improved year, but still a tough one as the economy is fragile, inflation is still lingering and could rear its ugly head at any time, and let’s not forget it is General Election year. As we know all too well, things can change at the drop of a hat.”
Michelle Lawson, director at Lawson Financial, concluded: “What will happen and what we wish will happen are two very different things.
“I think we will start to see things pick up at the start of next year as rates have been falling nicely and should boost consumer confidence.
“The only concern for 2024 is that we will have a General Election. We can only hope that we get a Housing Minister who sits in the seat long enough to warm it up.”
