The Intermediary – August 2025 - Flipbook - Page 17
RESIDENTIAL
Opinion
... while we can
Rightmove’s analysis shows that
improving buyer affordability is
stimulating stronger activity. The
number of sales being agreed is 5%
higher than at this time last year,
while the number of potential future
buyers contacting estate agents about
homes for sale is 6% higher than
last year.
The Government has commied
to a permanent Mortgage Guarantee
Scheme, providing lenders with
a Government-backed guarantee
against a fixed proportion of any
potential losses made on eligible
loans, continuing to support the
95% loan-to-value (LTV) end of the
market. Along with the Prudential
Regulation Authority’s (PRA) loanto-income (LTI) capital ratio review
and interim suspension of the current
15% threshold on 4.5-times income
cap, affordability prospects are good.
This followed the previous relaxing
of stress-testing, with several lenders
stating that this would increase
average borrowing capacity by £30,000
to £35,000.
Labour and protection
Protection will be vitally important as
people re-finance and buy to protect
against tightening labour market.
In September, we’re also expecting
a sizable refinancing boost, providing
intermediaries with the opportune
moment to broach the subject
with clients.
As affordability eases and monthly
payments are likely to come down
on remortgage, the argument for
directing some of those savings
towards income protection or other
relevant cover is stronger than it has
been for some time.
New opportunities
It may be time for brokers to rethink
whether to look at new markets.
The new-build sector is going to be
a key business stream for mortgage
intermediaries over the next four
years. We know that support for
new-build is significant, with £16bn
of new public investment destined to
fund 500,000 new homes, at the same
time unlocking over £53bn of private
investment, according to Government
estimates.
The bulk of Labour’s focus is in
supporting affordable homes, with
Shared Ownership housing provision
an important part of that. This market
is undoubtedly more specialist, but
it does represent a strong growth
opportunity, and is perhaps worth a
second look. One person’s challenge
is another’s opportunity, and so it
is in the buy-to-let (BTL) market at
the moment.
Amid scaremongering headlines in
the national media, the truth is that
the commercials in the private rented
sector are very strong for landlords
prepared to manage portfolios as a
sustained business concern.
Buy-to-let remains healthy
Rental growth is very strong and
shows no sign of abating. The selloff in properties by smaller portfolio
landlords is seemingly continuing,
yet with rates lower and prices down,
buying opportunities are everywhere.
Landlords continue to wait for the
outcome of the Minimum Energy
Efficiency Standards consultation
and confirmation of when and if this
will come to bear. This may trigger
landlords to rebalance portfolios along
with carrying out necessary retrofit
requirements.
When you stand back and look at
how well the market is performing, it
is even more extraordinary given the
prevailing economic uncertainty.
But that is the truth of the moment
we are in, and we should all grasp it
while it lasts. ●
February 2025 | The Intermediary
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