ROUND TABLE
MARKET
Mortgage market facing an uncertain future Mortgage Introducer’s Paul Lucas hosts a discussion on what’s ahead
T
he mortgage industry may have fallen on the right side of the COVID-19 pandemic, with house prices rising and the market thriving as people rushed for more space and to escape their city-based lifestyles. Now, however, a new shock is hitting the system: the cost-of-living crisis. Household bills are rising across the board, the Bank of England has hiked rates, and there could be worse to come. So, how will all of these factors affect mortgages for buyers? No one has a crystal ball, but Mortgage Introducer did the next best thing and, in association with Barclays, gathered together a collection of experts from eConveyancer, John Charcol, Try Financial, Pure Retirement, and Barclays itself to offer their insights into what we can expect to see unfold. TOO EARLY TO SEE REACTIONS The cost-of-living crisis is here. Energy companies are warning that 40 per cent of customers face fuel poverty, and it’s expected to get worse when the price cap is reviewed again in October. The economy has also reached a 40-year high in the rate of inflation, currently at nine per cent, and many commentators feel it will only continue to rise. However, Nicholas Mendes, mortgage technical manager at John Charcol, says the impact has yet to filter all the way through the system. “At the moment we’re still seeing property prices going up month on month, but I think … there is going to be an impact when first-time buyers at some point are going to have to look at it and go, ‘do we make the jump now, or do we want to see how things go?’”
he said. “Though property prices are increasing so much, their deposits aren’t.” Try Financial’s senior mortgage consultant Peter Sleigh isn’t so sure there will be any change on the demand side. “It’s too early to say if it’s going to change the mortgage landscape,” he said. “I would say longer mortgage terms are probably going to be requested where they can be, but borrowers and purchasers will still want that mortgage, and want it now. I don’t think the approach by borrowers will change; they will just find it more difficult to proceed.” That’s not to say trends aren’t already being observed in some quarters. The fascinating part is how things will play out, and head of sales at eConveyancer Sam Kirk has already spotted one change caused by the crisis. “Anecdotally, we’ve seen more product transfers against remortgages,” he said. “The feedback we’ve got from that is it’s because of affordability, not just because of speed, so we think that’s an interesting trend.” Offering further analysis was Anna Thompson, strategic distribution manager at Pure Retirement, who focuses on the over-55s who want lifetime mortgages. That demographic has shown a marked change, she explained. “The biggest difference for us is the increase in cash releases, so our clients are accessing their drawdown facility, and it’s not just the number of clients who are accessing that facility, it’s also the sense of urgency that has shocked us,” she said. “We’ve seen it in cash releases – the number of requests for escalations increases and increases, so that sense of urgency for customers needing that money to pay bills has increased over the last month or so.” Keen to stress the need for understanding on the
Mortgage Insider Podcast Expert analysis on the topics you want to know about. IBIM11236-BAR MI-Press-strips-mixed-v3.indd 1
32
MORTGAGE INTRODUCER JUNE 2022
25/05/2022 09:04
www.mortgageintroducer.com
