In episode 79 of the Growth Series podcast, Jeremy Duncombe, Managing Director at Accord Mortgages, speaks with Charles Roe, Director of Mortgages at UK Finance, and Rob Thomas, Principal Researcher at IMLA, about what lies ahead for the mortgage market in 2023.
Jeremy starts the conversation by asking for their gross mortgage lending forecasts. Both Charles and Rob expect to see a fall in the market over the next two years, due to squeezed incomes and significantly higher mortgage rates.
Rob also concedes he is far less confident than the OBR about inflation, and that he expects it to remain above the Bank of England’s two per cent target this year, due to stagnant productivity growth and wage pressures.
Jeremy then asks about house purchasing and remortgaging activity in 2023. Both Charles and Rob predict a decline, although Charles believes the buy-to-let market will stay robust in 2023.
However, Charles points out that changing regulatory requirements in the next few years, such as new energy efficiency requirements, could prompt smaller landlords with minimal portfolios to exit the market in the near future.
Finally, Charles and Rob are asked what issues brokers should be paying particular attention this year. Rob says brokers should keep an eye on where wage pressures are, because if it doesn’t ease significantly by next year, a cut in the Bank of England base rate is unlikely.
Charles advises brokers to pay attention to the introduction of Consumer Duty, as he believes it offers them opportunities to work with vulnerable customers and those who are coming to the end of their fixed rate mortgage deal.
Rob adds that the share of business done through intermediaries is set to hit a record high in 2024, which shows that their services are increasingly being valued by lenders and customers.
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00:23 to 18:12:
Introduction to the guests
Gross lending in 2023
Their thoughts on inflation and the wider economy
House purchasing and remortgaging activity
Can the private rental sector step in if the purchase market slows down?
Predictions for house prices in 2023
What topics and data should brokers be paying attention to in 2023?
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