Podcast #67 - What Happened in the Mortgage Market in 2021 and What Lies Ahead? (Part Two)

Added 24/02/22 - 2 min read

In episode 67 of the Growth Series podcast, Jeremy Duncombe, Managing Director of Accord Mortgages, is again joined by Charles Roe, Director of Mortgages at UK Finance and Rob Thomas, Principle Researcher at the Intermediary Mortgage Lenders Association (IMLA).

This time, they’re discussing how the mortgage market might perform in 2022. Rob expects to see gross mortgage lending of £275 billion, and Charles expects it to hit £281 billion.

The conversation then turns to the cost of living crisis and whether this could hit mortgage activity this year. Rob says higher inflation could push interest rates up, followed by higher mortgage rates. Charles, meanwhile, points out that the cost of living crisis will disproportionately impact first-time buyers and those who have stretched the affordability on their mortgage. This, he believes, will be reflected in arrears and possession figures.

Jeremy then asks about house prices, and Rob expects a four per cent increase this year, partly because of supply shortages.

The trio move on to discuss the end of Help to Buy and what the alternatives could be over the coming months.

Rob says the end of Help to Buy is a big shift for the market and that future government rollouts of new homes will be much smaller, before discussing alternatives such as private sector options.

Next, Jeremy asks what’s in store for the supply of homes and if the disparity with demand can be fixed this year.

Rob responds that the government wants to fix this problem and encourage more house building, but that it will be difficult to maintain with the end of Help to Buy and that the private sector will have to fill the gap.

Charles adds that the ageing population is also affecting what type of property is needed, as older people will want to downsize and live independently in retirement.

Charles and Rob are then asked about the outlook for the remortgaging market, and both are confident demand is there this year.

Finally, they discuss what data brokers should pay attention to this year. Charles highlights the changing energy requirements of properties and the new FCA Consumer Duty, while Rob says brokers should look at inflation and labour market figures, as this will affect interest rate decisions.

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