The begin of 2024 has seemingly begun on a extra constructive notice for the UK financial system, with the outlook showing somewhat brighter than it did throughout most of 2023.
Interest charges have come off their highs off the again of a gradual and unmoving Bank Base Rate (BBR), with lenders coming to market with better confidence and elevated urge for food, whereas the Bank of England (BoE) has suggested it expects to reach its target inflation rate of two per cent by May 2024.
Should these circumstances proceed to prevail, it’s seemingly that the central financial institution will transfer to chop the BBR within the second half of the 12 months, serving to to drive down swap charges, cut back the cost of borrowing and ease the affordability pressures dealing with customers.
This presents an excellent alternative for advisers to capitalise on rising optimism, with falling charges prone to result in a development in demand for mortgage recommendation as these debtors who sat on their fingers and adopted a wait-and-see strategy final 12 months begin to return to the market.
Better circumstances for debtors and brokers
Similarly, falling rates of interest imply many extra debtors could now have the ability to meet affordability standards, enabling them to remortgage away from their present lender quite than having to simply accept a product switch (PT) deal.
Not solely will this assist debtors safe a greater charge on their mortgage, however in some instances, it may possibly additionally assist advisers generate extra revenue by putting the business with a brand new lender.
This is especially necessary, given the truth that figures from the Financial Conduct Authority (FCA) present round one-and-a-half million householders are anticipated to return to the top of their fastened charge mortgage offers in 2024, whereas people who took out short-term fixes over the past 12 months can also be taking a look at methods to safe a greater charge.
Just over six months on from the introduction of the FCA’s Consumer Duty customary into the monetary providers market, advisers have additionally now had a while to adapt to the necessities of the regulator’s expectations and begin to implement any required modifications and enhancements wanted to make sure a customer-centric strategy.
This presents elevated alternatives for advisers to undertake a extra holistic tackle the recommendation course of, search methods to diversify their revenue streams and faucet into different areas of the market by addressing any safety or basic insurance coverage wants their shoppers could have alongside their mortgage.
Whether this implies working collaboratively with different adviser corporations, or becoming a member of a community, Consumer Duty does open up the potential for advisers to handle the challenges and limitations, significantly round client understanding of safety merchandise but in addition in different ancillary gross sales areas.
Is change afoot within the mortgage market?
As we head in direction of the spring, there may be additionally a rising expectation the Chancellor will announce some key housing and mortgage-related measures on the subsequent Budget, which can take place on the 6 March.
There have been rumours these would possibly embrace a lower to inheritance tax and the introduction of a brand new 99 per cent mortgage to worth (LTV) mortgage scheme, whereas additionally it is hoped he could contemplate requires an extension to the present lower to the stamp responsibility levy, and even its full abolition.
Given the notable absence of any measures centered on the housing market in final November’s Autumn Statement, any developments on this space might ship a substantial increase and provides the market a much-needed push ahead.
There are many the reason why 2024 seems to be set to be a greater 12 months than final, all of which ought to instil a better degree of confidence and optimism amongst advisers working within the mortgage market.
Certainly, this was noticeable, and in abundance, at our recent Kick-Off conferences in January for our appointed consultant corporations, who offered a way more assured manner about what the market might deliver them this 12 months.
As the financial system hopefully continues to enhance and the alternatives available in the market begin to extend, advisers – and their shoppers – ought to discover themselves in a extra secure and fruitful setting.
However, it can be crucial advisers profit from all of the alternatives available to them by establishing new relationships and searching for out these proper in entrance of them, significantly if they’re members of networks, as this will help them navigate any market challenges they might face and guarantee they profit from all beneficial circumstances.
