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UK Finance report - brokers respond

ended 12. December 2022

Newspage sought the views of brokers on this report from UK Finance that was published this morning.

6 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This report made me spit my cornflakes out. It was like Jimmy Carr was reading it. Firstly it offers no comment on the shambolic Truss government which, for mortgages, was like an atomic bomb. Then it goes on to suggest, despite one of the most severe recessions on record predicted, unemployment will remain low. I’m not sure which privileged economist was commissioned to research this, but they must be truly out of touch with what is going on in the real economy for those on modest incomes but with housing debt.
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Hannah Bashford
Director at Model Financial Solutions
The combination of interest rate rises, inflation and the cost of living crisis are all going to affect the housing market and it is going to be harder for people to borrow what they need to buy property. People coming off low or ultra lowinterest rates are going to have less disposable income. The optimistic view of unemployment may be misplaced and this will have an impact on repossessions. I find it interesting that even the outlook for 23/24 repossessions is far lower than we saw in 2011/12, which is good but may just be a result of catch up from the courts, not a realistic indication of people being able to afford their mortgage. Now more than ever it is important to get advice and make sure you have the best deal. If you are struggling to make payments, get advice on the options available so repossession and arrears are avoided.
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Marcus Wright
Managing Director at Bolton Business Finance
The UK Finance prediction of a 27% decline in lending to landlords is pretty much in line with what we are already seeing in the market. Many buy-to-let mortgage applications are not progressing further, once they see how much the interest rate will be. Fixed buy-to-let rates are in many cases double what they were 12 months ago, making many property investments not viable. This will no doubt feed into house prices, along with reduced household purchases.
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Justin Moy
Managing Director at EHF Mortgages
This is further recognition that we have some tough years coming up for those looking to buy a property, with pressure on mortgage rates and overall expenditure costs set to be more pronounced in 2023/4. A significant amount of mortgages will be Product Transfers, especially Buy to Let, as affordability assessments may prohibit any other option. I hope that lenders don't see this as an opportunity to increase margins for those product lines.
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Imran Hussain
Director at Harmony Financial Services
The report makes no mention of Kamikwasi and Trussonomics and the effect they have had on the property and mortgage market. I think most expected a slightly slower 2023, but the fact there is no mention of the effect of the mini-Budget is absurd. Also, the expectation that the vast majority of people will be able to keep up with their mortgage payments seems disconnected from reality. We are entering a period of unprecedented economic uncertainty, not a slightly bumpy ride.
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Gary Boakes
Director at Verve Financial
With affordability assessments tightening, it is going to be more important than ever to speak with a mortgage broker. Lenders are already making differences, with some pushing Product Transfers to six months and with the ability to review and cancel rates if the market was to drop, which is only going to make life easier for customers. It is going to be so important that customers engage with a mortgage broker as early as they can so they can take advantage of any rate changes to ensure they have the best deal possible.