"Market analysts anticipate a gradual reduction in interest rates, which is expected to rejuvenate the mortgage landscape."
As we navigate through 2024, it seems a long time since there was anything like a BAU year in the mortgage market. The first six months of the year have presented their fair share of challenges, as inflation has very gradually returned to more normal levels, customers have continued to adjust to a higher rate environment, and, the uncertainty that always surrounds a general election. However, as we move into the second half of the year, there’s a growing sense of optimism about the opportunities that lie ahead for mortgage advisers.
The initial months of 2024 have very much been a waiting game, with many customers grappling with the reality of higher interest rates, and holding out for rates to fall. This adjustment period has naturally led to a cautious approach towards mortgage applications and property transactions. This waiting game was only exacerbated when a July general election was announced in May.
However, as we’ve come to expect - despite the challenges, the resilience of the mortgage market has been unwavering. Advisers have continued to provide valuable guidance to customers, helping them understand their options and make informed decisions amidst fluctuating conditions.
Looking ahead, there are promising signs that the second half of the year will bring more favourable conditions for both advisers and customers. Market analysts anticipate a gradual reduction in interest rates, which is expected to rejuvenate the mortgage landscape. Lower rates won’t only make borrowing more affordable but also restore confidence among potential homebuyers and investors.
In a recent news story, Rob Jupp, CEO of the Brightstar Group, highlighted a key factor in this optimistic outlook, saying: “The one thing markets do not like is uncertainty, and on the assumption that there will be a majority Government elected in July, there should be greater certainty in the second half of 2024 than the first half.” Jupp predicts a strong market performance, stating, “If you consider a standard year to have a 50/50 split between the first half of the year and the second half in terms of business volumes, we think the split for the market this year will be more like 65% versus 35% in favour of H2 2024. We are predicting a very strong second half to the year.”
This anticipated rate reduction, combined with a more stable political outlook, suggests there’s good reason for optimism. Customers who’ve been holding back due to rate concerns may find the latter half of the year an opportune time to proceed with their plans, and this would mean a very busy period for mortgage advisers. This greater sense of optimism and activity is further supported by May’s RICS Residential Market Survey, after it suggested that transactions could continue to rise over the next few months, buoyed by a better flow of stock onto the market. Moreover, we’ve also seen five consecutive months of growing numbers of mortgage products available on the market. The current volume is the highest since Moneyfacts since February 2008.
As the market becomes busier, the importance of lender service comes to the fore. In a competitive purchase market, the ability to transact quickly can be a key differentiator and those remortgage customers who previously held back from making a change will now want to move quickly.
As confidence returns and rates are expected to become more favourable, the second half of 2024 should prove to be full of opportunity for brokers. The key to making the most of this opportunity will lie in working with the right lenders so you can have the confidence that you’re delivering the best possible service and outcomes for your customers.
Let’s embrace the opportunities ahead and work together to make the second half of 2024 a resounding success for all.
