The Intermediary – February 2025 - Flipbook - Page 7
RESIDENTIAL
Opinion
The return of a
sleeping giant
I
’ve never been much of a
crystal ball gazer, outside
of my annual wish for
Leeds United glory in both
the Premiership and The
Champions League! While I
don’t hold out too much hope for that
personal aspiration, I feel much more
confident and optimistic about 2025.
This may partly be fuelled by the joy
of my fih wedding anniversary, a
certain Mancunian band reforming,
and a high-flying West Yorkshire
team, but also that the UK mortgage
market will continue to improve.
The market has proven itself to
be resilient through a turbulent
2024, having adapted well to swap
rate fluctuations at the same time as
embracing political change.
Easing pressure
2024 demanded greater than
expected resilience from lenders,
intermediaries and borrowers. This,
thankfully, looks set to recede in
2025 as cost and rate pressures start
to subside – thanks to lower inflation
and two Bank of England base rate
reductions last year and a further one
early this.
This strong foundation has provided
a positive springboard into 2025.
The Intermediary Mortgage Lenders
Association (IMLA) predicts that
we will see gross mortgage lending
reach £275bn, up 16% on its yearend forecast – which lest we forget
represented a 6% rise on the turgid
year of 2023.
We are expecting to see steady
growth in lending this year, with
IMLA forecasts also reflecting
favourably on the buy-to-let (BTL)
sector, which it predicts will improve
to £38bn (up 14%), driven largely by
improved affordability as interest rates
fall and rents continue to rise.
I also wouldn’t be surprised to see
more landlords turning to houses
in multiple occupation (HMOs) and
multi-unit freehold blocks (MUFBs) to
further expand their portfolios.
The general feeling from the
intermediary sector is that market
activity is on the up, and ‘positivity’
is a word that is being used in
abundance.
Savills has confidently predicted
that 2025 will be a positive year for
house price movement, suggesting
improved confidence among buyers
as it forecast robust average UK house
price growth of 4%, with this likely to
be supported by further base rate cuts
throughout the year.
Lender innovation
2025: The sleeping giant of remortgaging awakes
Collaboration between intermediary
and lender has never been more
important, as the needs of the UK
mortgage customer have altered
significantly in recent years, driving
lenders to be more innovative
in product design, delivery and
implementation. It is incumbent on us
all to educate the UK population on all
the options available.
It is estimated that 1.8 million
borrowers will come to the end of their
deal in 2025, a significant increase on
the previous year. Consequently, it is
likely that 2025 will see the sleeping
CHARLES MORLEY
is director of mortgage
distribution at Metro Bank
The next 12 months
are likely to be viewed as
more of a marathon than
a sprint, but thankfully
the course appears flat, if
not slightly downhill”
giant that is the remortgage market
awake from its slumber and further
spotlight the importance of advice, as
we see 2-year and 5-year swap rates –
at the time of writing – very close to
parity, providing a further dilemma of
choice and opportunity.
January and February are always
months of reflection – and for many,
of abstinence – as we reset and step
into the starting blocks yet again.
The next 12 months are likely to be
viewed as more of a marathon than
a sprint, but thankfully the course
appears flat, if not slightly downhill
as the opportunity for us all to succeed
is most definitely there for the taking,
with both UK Finance and IMLA
predicting a larger mortgage market
and increased customer demand.
So, as I cast aside my crystal ball,
marvel at Leeds United’s exalted
league position and my very happy
marriage, I can do so while viewing
the landscape of our mortgage sector
as one of opportunity and increased
stability. Positivity is seeping from
every pore, driven by expected growth
in both lending and house prices. ●
February 2025 | The Intermediary
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