2022 has been another year full of twists and turns in the mortgage market, many of which will have long-term implications for consumers and businesses alike.
We asked some leading figures in the industry to look back at the year and reflect on what they have learned. Although everyone agrees it has been an exceptionally difficult year, there have been many positive learnings and an overriding sense that the industry has worked tirelessly to rally round to provide homeowners and buyers with the best support and advice they can.
Clare believes 2022 has been another exceptional year for the mortgage industry, as advisers have overcome many difficulties to support their clients.
“Advisers were certainly very busy in 2021 and they’ve navigated the same pressures (and more) this year, particularly in the first eight months. In the face of changing rates, coupled with last-minute product and lender withdrawals, brokers have kept cool heads. Of course, the unprecedented fallout of the Mini Budget fanned the flames, and brokers have had the responsibility of easing the concerns of anxious customers.”
Clare adds that seeing the industry come together despite these obstacles was her professional highlight of 2022.
“Everyone has worked incredibly hard to achieve the best outcomes and it’s reminded me of why I joined this wonderful sector; to help people, especially in a time of need.”
For Nathan, 2022 has been another challenging year for the mortgage industry, due to factors such as rising inflation, war in Europe and the “chaos” caused by the Mini Budget. However, he notes that the sector has once again pulled together and showed its resilience in order to support mortgage customers.
“Reflecting on the last few years in general, whilst all parties from across the market may welcome a period of calm and stability (which is unfortunately unlikely to be the case in the near future), the constantly evolving ‘new normal’ seems to be an environment in which the intermediary market thrives. All parties should be commended for this and also feel a high degree of positivity for the future as a result.”
He describes the way that key intermediary and lender partners responded to the pressure the Mini Budget put on sourcing systems as his personal highlight of 2022.
“Whilst we pride ourselves on ensuring our system is always accurate and up to date, a 400% increase in product changes overnight and across a number of days made this a real challenge. Appreciating the enormous pressure this put on our colleagues, the reassuring and understanding response we received from our key partners helped us manage this situation more effectively.”
Nathan adds that over the last year, change isn’t always easy or comfortable, but that it is necessary and will ultimately lead to positivity. As an example, he cites that during 2022, Twenty7Tec acquired Bluecoat Software, a practice management solution provider operating across both the mortgage and wealth markets.
“For me personally, this was the first time I’d been part of a business during an acquisition and subsequent integration process. As someone that prides themself on being organised, the necessary and inevitable diary crashing and shifting of priorities definitely wasn’t easy, whilst on a business level, extending into a new market and adjusting roles accordingly led to many (including me) having to step outside of their comfort zones.
“Six months down the line, it’s amazing to reflect on the progress everyone across the business has made and the positive changes we’ve delivered, not just as part of the acquisition but wider, as individuals have concurrently taken the opportunity to revisit existing processes and ways of working in order to improve.”
Danny says the mortgage market has maintained its strong performance throughout 2022, with various lenders noting a record year, and strong refinance activity supplementing the robust demand from first-time buyers.
“It is fantastic to see so many homeowners supported, especially in this challenging economic period. Of course, the second half of the year has been more challenging than the first, due to external economic factors, but it has been brilliant to see everyone club together to achieve the best outcomes for all parties.”
For Danny, seeing how the market has weathered the economic storm and supported its customers has been a highlight of 2022.
“Our sector is famed for its resilience and we have proved it in every month this year. This year has reminded everyone that nothing stays the same in our industry for long, as everything, from the tech we use to products we offer, evolves in line with changing economic and social factors.”
Sebastian describes 2022 as a year of “two very unequal halves”, as it started with the mortgage market continuing from strength to strength, rapid house price growth, demand outstripping supply and low mortgage rates.
“Then… it stopped. October saw rates rise at the quickest rate that I can ever remember, with 5-year fixed rates starting the month beginning with a 3 and ending the month with a 5 if you were lucky and a 6 if you were not. Turbulent doesn’t even begin to describe the chaos. Happily, November has shown that rates can go down as well as up, with the last twenty lender comms all being rate reductions, thank goodness.”
Sebastian says the sector has faced “the toughest market since the credit crunch”, but praises how brokers have pulled together and supported each other. He adds 2022 has taught him that the media “loves a bad news story”.
“Prices crash = prices return to where they were twelve months ago. Mortgage payments treble = the small interest rate element on your repayment mortgage has increased quite a bit – not ever good news, but some way from the scaremongering. It appears that Private Frazer has been the main copywriter for 2022. We’re not all doomed…. but it’s been a tough few months.”
For Graham, conditions in the mortgage market were good until Russia’s invasion of Ukraine, rising inflation and Liz Truss’s brief premiership “knocked us off course”. He believes he has learned many things over the last year, notably that first-time buyers are a “resilient bunch” and that a mortgage adviser is “worth their weight in gold in a crisis”.
Furthermore, he says 2022 has shown that advisers shouldn’t resist the march of technology, as combining tech with a human approach is “the way forward”, and that clear communication is “key in a crisis”.
Graham also notes that the last year has demonstrated that Shared Ownership is a “good option” for many people, while Tracker Mortgages are “back in fashion”.
Martin says 2022 was meant to be a year where the market could enjoy greater calm and stability. However, he believes it has just gone through one of its most stressful periods.
“The constant product withdrawals and price rises have meant that the adviser community have been working flat out to ensure that their clients received the best deal possible, whilst also having to calm the nerves of many worried clients who are due to change product in the next 12 months.”
Martin adds that the year has shown the “unbelievable” resilience of mortgage advisers, as they still managed to “deliver excellence to their clients, reappraise their business where needed and continue to be successful” during this period. In addition, he believes they have managed to “come together to support one another as a true community”, which he describes as “very humbling to see”.
Brian attributes much of the UK’s recent economic difficulties to Russia’s invasion of Ukraine, stating that problems such as damage to supply chains and double-digit inflation would have been “largely unthinkable” a year ago.
“But the reality is that the world, and in particular our economy, has changed significantly, which should teach us to always consider and plan for the unexpected. Twenty twenty-two has certainly presented the broker market with some significant challenges, in particular, the chaos that was caused to mortgage pricing that followed the ill-fated Mini Budget” introduced by the Truss/Kwarteng c44-day government.
“This resulted in some lenders being effectively unable to price mortgage products, others attempted to price and launch ranges, only to have to withdraw those same products in a matter of hours. This created huge frustration and stress to both brokers and their customers with brokers working some crazy hours to try to do the right thing for their customers.”
Brian points out that brokers who have joined the industry since 2007 have only known a falling interest rate environment, but that has now changed.
“The four- and five-fold increase in mortgage rates that the market has experienced in a matter of a few short months has presented many brokers with an entirely different narrative when talking to their customers, many of whom have also only previously seen rates head in one direction. Consequently, we have started to see some degree of momentum towards variable rates as the margin differential currently between many tracker products and the lowest priced fixed rates is in the region of 150bps.”
Craig describes 2022 as “a year of two halves, with a strong start to the year driven by the continued post-pandemic demand”. However, he said the growing cost of living crisis led to a slowdown in the summer, and the Mini Budget caused “complete carnage”.
“Thankfully we have seen the markets stabilise in recent weeks. The highlight [of 2022] has to be the amazing intermediaries that remain ever-present for their customers.”
Craig adds that this year has demonstrated how collaboration and communication is “vital for all parties”, and that “we are stronger together”.
Richard says the activity and volumes from last year continued into the first half of 2022, but then the Mini Budget “took the market into overdrive and not necessarily in a good way”.
“Politics crossed over into the economics and emotions of the housing market in a negative way. Indeed, the political issues read like some of the 12 days of Christmas, 4 Chancellors of the Exchequer, 3 Prime Ministers, 2-year fixed rates becoming very expensive and one market facing significant change for all participants.
“The highlight for me would be the way the broker market reacted, which was positively, professionally and with the customer at the heart of the issue. With products being “pulled” at an alarming rate, and lenders having to raise rates, it could have led to potentially a real downturn in the market. Whilst we are not out of the woods yet, what this market still offers is opportunity; opportunity for lenders to innovate, advisers to communicate and distributors to keep participating within, and for the benefit of, the intermediary sector.”
Richard adds that while advisers can “never assume”, “the market has proved its resilience”.
“As one door closes another one opens. The market could be looking at its Covid moment currently, where during Covid, the market unexpectedly boomed. Perhaps now what is happening many would have thought would have happened in the dark days of Covid.”
Matthew believes 2022 has been a “real rollercoaster of a year”, and describes it as “the year that we were all cut off from cheap credit”.
“The slow steady rises kept us all working to ridiculous deadlines and then the unnecessary madness of swap rates. What a difference a year makes. My highlight was the way the intermediary sector remained positive and resilient after the swap rate fiasco. Probably the most united the sector has been.”
Matthew adds that recent events have shown it is not just people working in the industry who have not experienced rate rises and “high” rates before, as many clients will also be unfamiliar with these conditions.
Vikki says brokers have been “critical” this year, as customers have needed and relied on “valuable” advice.
“The market has been incredibly difficult to navigate, especially in the final quarter, and this is where the value of advice has been more important than ever. I am so proud of how many customers have been helped and supported by brokers in 2022.”
Vikki adds that the last few months have shown that market conditions can “change overnight”, which means brokers should always be prepared and “not rest on your laurels”.
Neil believes that while the challenges posed in 2022, such as the war in Ukraine and political upheaval, were different from the previous two years dominated by Covid, they were just as impactful.
“I feel that we have all dealt with it remarkably well. For me there were two real highlights. Firstly, the acquisition of Mortgage Engine that supported our vision of creating some standardisation in this market for integrations with lenders, and secondly, the way we were able to cope with the volume of product changes ensuring that our systems remained up to date for both lenders and intermediaries.
Neil says the last year has shown that collaboration, communication and trust are “critical for us as an industry if we really want to make positive changes”.
“But at the same time history can be our greatest enemy. Working together with competitors and providers to create better solutions that benefit everyone can be achieved and I think we have started to demonstrate that in the last year.”
Although Adrian believes the market “ran out of steam” in the final quarter of the year, he believes 2022 was still a “remarkably strong year”.
“I loved showing lenders and valuers around our Zed House, a unique zero carbon concept home that showcases the future of sustainable living in the UK.”
He adds that even veterans in the mortgage industry will have had to cope with new circumstances over the last 12 months.
“If you think after nearly 40 years in the industry, you’ve seen it all before… you haven’t.”
Kelly describes 2022 as a year of uncertainty, as mortgage product numbers dropped by more than half during the week following September’s Mini Budget.
“In fact, numbers went lower than what we saw during the pandemic, which was a shock to all, especially when key lenders started to pull out of the market. The highlight for me is seeing how users are continuing to embrace technology to remain up to date with market changes, adopting client portals to communicate with their clients, video calls for appointments and utilising integration built-in systems to make their jobs easier.”
Kelly says the year has taught her how “things can change very quickly”.
“Interest rates have risen to rates we've not seen in the market for over 14 years and the speed of these rate changes is very difficult for all in the industry to keep up with, from lenders to software providers, brokers through to consumers. It's been a very difficult few years with the pandemic and speed of product changes in the market this year. It makes brokers' jobs harder with rates being pulled so quickly and of course puts pressure on sourcing systems to keep on top of the changes to support brokers, so it's key that we all work together to support this ever-changing market.”
Mortgage adviser resilience has been a notable theme for Jackie in 2022… “After what was a demanding couple of years during the pandemic, there was hope that we’d be coming into a period of normality”.
But in a difficult financial context, made worse by a disastrous mini-budget, mortgage advisers have faced another challenging 12 months.
“One thing I've learnt is how resilient mortgage advisers are. During the tumultuous days following the mini-budget at the end of September, mortgage advisers up and down the country were getting worried calls from their clients but we got through a difficult period and have provided huge value to our clients, giving them the best possible outcomes during a torrid time.”
It was the positives that took Stephanie by surprise in 2022:
“The purchase market has definitely been more buoyant than expected… It held strong for most of the year.”
It wasn’t just markets that left Stephanie pleasantly surprised. For her, the advice industry as a whole held strong too:
“Though we all still bearing the scars of the mini-budget, for me the highlight was the way the industry, and most importantly, the ‘advice community’ handled the aftermath”
“We saw mortgage advisers on not just mainstream news but primetime TV programmes highlighting the need for advice and why the support and guidance they can provide consumers is invaluable when times are complicated and confusing.”
For David, the past year in the mortgage market demonstrates just how resilient the intermediary market can be in times of volatility, stretching everybody to the limit.
“This year has once again reminded us just how quickly things can change and the need for advisers and their customers to expect the unexpected. Moving from all-time lows in mortgage rates last year to a rapidly rising market was a shift of gear even before the consequences of the mini budget sent the market into turmoil.
Add in the rising cost of living, the war in Ukraine and threat of impending recession and it seems a long way from the economy emerging from the pandemic and a housing market struggling to keep up with demand.
“That only underlines how important it is for borrowers to take advice and understand that the unexpected can happen and how they can best defend against it.”
For Jeremy, we can summarise 2022 in one word “volatile”. Despite this, brokers still have plenty to be proud about… “So much was thrown at the market this year and I’m most proud about how we managed to maintain our focus on service, communication and proposition development with so many distractions.”
It all boils down to resilience for Jeremy: “I’m constantly impressed with how resilient our teams and our brokers are, but this year has surpassed my expectations. I want to give a huge shout out to the Accord team who have been relentless in their desire to help, support and guide brokers through so many challenges”.
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