Mortgage brokers have faced a series of notable challenges in recent years. The combination of high inflation and an elevated cost of borrowing has impacted the amount their clients will spend on a property, while significant tax and regulatory reforms – such as those brought forward in the recent Autumn Budget – has forced property investors, and in turn brokers, to reassess their plans.
The buy-to-let sector has certainly needed to adapt to the economic and political shifts that have played out this year. However, despite these hurdles, the property investment landscape post-Budget is more promising than many had anticipated it would be earlier this year.
Indeed, sentiment has shifted in a positive direction in recent weeks, even if there was some short-term uncertainty in the lead up to the Budget. Largely, this has been due to the fact that the Bank of England has reduced the base rate twice since August.
More generally, there is a sense that buyers and sellers alike are now more accepting of the interest rate environment; while higher than the rates seen between 2008 and 2021, the current levels are still below the norms seen in the decades preceding that period.
That the market is adapting well can be seen in both house price growth and transactional activity. According to data from Zoopla, for example, the number of sales agreed in October 2024 was 25 per cent higher than the same period last year, while buyer demand surged by 22 per cent. In response, Zoopla has revised its forecast for the year ahead, now predicting that house prices could grow by more than 2.5 per cent.
Avoiding complacency as the market stabilises
This data paints a far more positive picture of the property market than some commentators would be willing to entertain. But that is not to say it is smooth sailing for mortgage brokers, who still face significant challenges in delivering for their clients.
Indeed, complacency is not an option for those of us in the specialist finance sector. While the market has demonstrated remarkable resilience over the past few years, an improving economic climate does not mean we can afford to stop supporting and educating brokers.
The property investment landscape may well be stabilising, but it remains unpredictable. As a result, this period of positive sentiment should be seen as an opportunity to double down on enhancing broker knowledge and delivering proactive support. In doing so, we can collectively prepare the market for any challenges that could arise in the future, and ensure that borrowers can find the support that they need.
Recognising that borrowers’ needs have changed
The first step in achieving this is recognising that the needs of borrowers have evolved significantly in recent years, and their expectations for the support that they want brokers to provide are very different to where they were pre-December 2021.
Indeed, before the BoE embarked on its rate hiking cycle, securing the lowest rate was often the primary factor driving borrowers’ decision-making about which broker to use.
2.5%
Zoopla has revised its forecast for the year ahead, now predicting that house prices could grow by more than 2.5 per cent.