Brokers - How do your activity levels compare with previous years?

As we approach Christmas, lights turn on in town centres and shops play the same ten Christmas tunes on repeat 24/7, we see a drop in mortgage activity as everything becomes a "New Year" job for many people. This is certainly the case with purchase business, as people keep their powder dry in the hope of falls in both mortgage rates and property prices. Remortgage business has, however, picked up during the latter part of the year and we expect a lot more in 2023, with lots of 5-year fixed rate deals maturing. I'm already speaking to clients who have deals ending in May 2023 to start the review process, ensuring they have time to properly discuss their options and weigh up the cost implications for them of, no doubt, higher interest rates. It also means we have enough time to accommodate lenders still suffering back-logs and the woeful service by some conveyancing firms.

The mortgage world usually slows down at this time of the year, and this is especially the case for new purchase applications. However, this year, since October, I have seen a much more significant drop in purchase applications. Certain lenders now allow product transfers to be secured up to six months in advance, so I have seen more activity in this area than at this time last year. It seems apparent, that borrowers want to secure a new rate quickly, rather than wait until a month before it ends. Going into 2023, I feel at least in the first half, there will be greater remortgage and product transfer business done than new purchase applications. Once potential buyers see how the property market is in 2023, then we could see purchase applications increase in the second half of 2023.

For the mortgage market, Christmas came early in 2022, but not in a good way. The number of people searching for mortgage advice online had dropped to typical “December” levels by mid-October so I would think most brokers are now seeing the effect of that in their submitted business levels. I fear that lenders who have smashed their own lending targets are using the remainder of the year to get on top of their service levels, which have been woeful for the most part of 2022, without investing in the technology and/or underwriters they need going forward. So while we will see service levels start 2023 back to normal, come mid-February when the pent-up demand comes to fruition, they will be struggling again. My advice to lenders would be to get on and cut rates now to smooth out the service curve. These customers aren’t going away, they are simply playing a waiting game.

Activity across the residential market has certainly changed when assessing the end of this year VS the end of last year. Consumers were looking at a very different market to the current market as the Bank of England Base Rate was sat at 0.1% until it increased to 0.25% on the 16th December 2021. As opposed to the 3% it is currently sat at.. for now.. Business volumes were significant and didn't really let up over the festive break of 2021.. I can remember securing mortgages all the way through the Christmas period due to the demand. The last month has been much more quiet in terms of business volumes due to, in my opinion, the uncertainty in the market. We're still seeing lenders decreasing rates further and property prices potentially change which gives us as Advisors more of an opportunity to show our worth and guide clients through uncertain times. It's already started but I anticipate it to pick up significantly after the festive break or even before, looking at the changes in lenders fixed rates and call volumes.