Brokers have conflicting views on the most popular areas of the market
The UK housing market is enduring a period of turbulence – but there is still plenty of business out there for savvy brokers. So which areas of the market, schemes, and products, are proving popular among buyers currently and could be a potential focal point for your business?
Mortgage Introducer reached out to brokers to find out.
Residential purchases
Kirsty Wells (pictured left), director at Blueprint Mortgages & Protection, said she has primarily been dealing with enquiries for residential purchases.
“August was very slow for purchases but September has been positive, with lots of clients finding their dream home and many first-time buyers deciding now is the right time for them to buy, as the property they wanted has dropped to within budget,” she said.
From what Wells has seen, the majority of first-time buyers are buying two, three or four bedroom houses, which she added have the possibility of a drop in value in the short term. However, Wells said most of these clients are switching from renting to buying and will live in the property for over five years, by which time she believes the property market will have settled, and the worst case is the home has returned to the value it was purchased at, so it is unlikely for there to be any monetary loss.
Product transfers
David Walsh (pictured right), director at Kite Mortgages, said there has been a significant increase in product transfer enquiries, which he believes is the result of lenders extending the earliest date of application from three to six months.
“This has coincided with many lenders improving choices around cancelling a product transfer application once offered,” he said.
With rate changes being what they have been, Walsh said locking in a rate as early as possible is in the clients’ best interest.
“Most high-street banks have similarly priced rates and we find clients split; some want the best deal possible and are happy to take on the admin of switching lenders, others just want an easy life, so a marginally higher rate on a product transfer is fine with them,” he said.
For those people, Walsh said the changes above have made it an even more attractive proposition, contributing to the uptick.
Shared ownership
Diarmuid Phoenix, mortgage and protection adviser at Mint Mortgages & Protection, said he has witnessed a significant increase in the number of shared ownership enquiries.
Phoenix believes this can be put down to a combination of the cost-of-living crisis and the ballooning of interest rates, leaving first-time buyers with no other option for getting on to the ladder.
“We have advised anyone who has savings, and still wishes to go down this avenue, to consider putting down at least a 5% deposit, provided it does not use up their rainy-day fund, as it will open up more lender choices for them,” he said.
However, with the news of inflation slowing further, and if rate reductions follow, Phoenix believes there could be fewer people feeling the need to go down the shared ownership route in the future.
Limited company buy-to-let
Meanwhile, David Sharpstone, director at CIS Mortgage Advice, has witnessed a lot more enquiries for limited company buy-to-lets, especially in the Midlands and north of the country.
Sharpstone believes this is no surprise, as rental stress tests just do not stack up to achieve the mortgage lending required for many properties in the south.
Over the last few years there has been a significant push toward energy efficiency and reduced carbon emissions. As a result of these considerations, Sharpstone said many landlords are having to reassess their position.
“With a lot of small landlords disposing of property owned in their name due to the tax position and changes to EPC rules, 2024 is certainly going to be the year of the limited company buy-to-let mortgage,” he said.
What areas of the market have you seen the most demand for in recent times? Let us know in the comment section below.
