What are you seeing high demand for?

Amid the ebb and flow of the property market, we are seeing the winds blow in different directions this year. From maturing tenant demographic, with average tenants now being older than ever before, to the prominence of build-to-rent properties, the investment landscape has shifted in 2023. Energy efficiency has gained prominence while rental 'reforms' loom on the horizon. Consequently, it is anticipated that there will be 300% more landlords selling up this year.

Incorporation is now the name of the game. Three-quarters of UK landlords have embraced the benefits of limited companies for their property investments. CGT allowance cuts will ripple through the market in 2023 and beyond. Landlords will feel the squeeze as most allowances dwindle, effectively increasing their tax burden. The cost-of-living crisis has also cast a shadow over the BTL market, leading to difficulties for many in securing financing. From seasoned investors to FTBs, the game has become more exciting this year.

Hands down the most in demand properties at the moment are the lower priced ones within reach of first-time buyers. Runaway rents still make buying generally a cheaper and more secure option even without a deposit sometimes and we are now seeing an element of customers downsizing to move to cheaper properties now that monthly mortgage costs are higher. Extra bedrooms that never get used are turning out to be an expensive luxury.

I am seeing a huge spike in interest on 2 year fixed deals. Majority of clients like the idea of stability with their payments and borrowers have the optimistic hope that rates will drop after this fixed period finishes so they can renegotiate a better deal. Naturally, at this time of year there's been a drop in purchase enquiries however borrowers are more savvy to get their finances in order a secure a remortgage deal 6 months in advance of existing renewal dates.

I'm seeing an increase in clients looking for protection reviews and including income protection. I think the reason for this is that between covid and the cost of living crisis, people are painfully aware of how much a drop in income can impact them and now that they are living much closer to the top end of their budgets there is no room to absorb a drop in income due to sickness like they might have been able to do so before.

At JB mortgages we have seen a slight dip in purchase activity, most likely due to high mortgage rates and the affordability issues this presents. The bulk of our business recently has been remortgage business from existing clients whose fixed rates are due to end. Most of these clients are taking 2 year fixed rates, with interest rates being so high it seems people are reluctant to take a fixed rate for any longer than this in the hope that rates may drop by 2025.

Remortgages are certainly prevalent at the moment, finding ways to combat the substantial increase in interest rates. We have many mortgage holders who have been on record low-interest rates for a few years now being met with substantially higher payments.

We are starting to see an increase in their mortgage term, consider part & part and interest-only mortgages to help cushion the blow.

Most people are hedging their bets on short-term deals like 2 year fixed in the hope that interest rates will come down in the near future.