The Intermediary – September 2025 - Flipbook - Page 60
RESIDENTIAL
Opinion
The future is
bright for the
mortgage market
I
t’s shaping up to be another
interesting year in the
mortgage market. Stamp Duty
incentives for first-time buyers
were removed in March and
interest rates haven’t come
down as quickly as expected. Growth
and inflation continue to prove
challenging, and there is evidence of
slowing housing transactions, with
some reporting a slight dip in prices.
However, the sector consistently
demonstrates great resilience, and
I remain confident in the market’s
ability to react, flex and thrive.
The fact is, despite some ongoing
volatility, we’ve had a very good
summer as an industry, and there’s
a lot of positivity from brokers, who
have adjusted to the new mortgage
interest rate reality – including the
realisation that a return to the 2%
examples of the recent past is unlikely.
Brokers are helping borrowers
understand that what we’re seeing
today is likely to be the new norm,
bringing more consistency and
stability in place of the ‘sit-and-wait’
approach some were employing
in the hope there would be further
significant falls.
The boom line is that people are
still looking to buy homes. Product
transfer and remortgage volumes have
also remained strong, keeping brokers
busy. The flaening-out of rate
volatility has brought fresh calm and
reduced the need to keep reworking
cases, allowing brokers to focus on
deepening personal support and
exploring new business opportunities.
Much of the optimism is also driven
by the affordability changes we’ve seen
this year, which lenders are starting
to react to, such as the loan-to-income
(LTI) limit review and the regulator’s
clarification of its rules around
affordability calculations.
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The Intermediary | September 2025
These have provided lenders with
greater flexibility to lend, where
previously they were restricted, for
example, by LTI caps. This allows
them to formulate their own risk
appetites and lending strategies to help
borrowers in the best way.
The clarity provided by the
regulator also means that lenders can
deploy the best possible interpretation
of the rules. We’re now able to lend
borrowers on average 15% (£37,000)
more as a result of changes we’ve made
in response to the updated guidance.
This, coupled with the LTI changes,
unlocks the market for those who had
perhaps given up trying to get onto the
property ladder, believing they just
couldn’t borrow enough.
Customer contact
The feedback we’re receiving suggests
there are people out there who still
don’t realise what the recent changes
could mean for them, and therefore
it’s our responsibility – and that of
our valued broker partners – to make
them aware.
We can help brokers with this
through content such as our Growth
Series, which can support with
customer contact strategies, and social
media advice to target new audiences.
Business development teams can also
help explain the actual difference this
will make to clients.
All this is fantastic – but we can’t
ignore the fact that by creating fresh
demand for property, these changes
could also start driving up house prices
– especially if that demand exceeds
supply. This would affect people at all
stages of the housing cycle, and is why
it’s so important for the Government
to deliver on its house building
promises in order to create fresh
supply, as well as reviewing its policies
on things like property taxation to
JEREMY DUNCOMBE
is managing director
of Accord Mortgages
encourage more people to move.
Those looking to downsize may be
put off by the prospect of Stamp Duty,
which is why we’ve lobbied for change
in this space via our policy paper,
‘Home Improvements’. Having a
strong voice from lenders is important
to help to fix some of these challenges.
At Accord, we’ve always tried
to ensure we’re at the forefront of
product and service innovation, and
we’ve had some great successes in the
past six months – including being one
of the first lenders to review our stress
interest rate, and announce changes in
response to the LTI review.
We hope that these things,
alongside changes to our new-build
proposition to lend up to 95%, and
the introduction of parity pricing to
remove the new-build premium across
all our products, have made a genuine
difference to borrowers’ prospects.
We’ve also provided support for
underserved groups through our
most recent change, which enhances
criteria for those who do not have
indefinite leave to remain, and
changes our rules for the acceptance of
Universal Credit.
But as ever, there’s more to do for
all market participants – from the
Government to regulators, lenders
and brokers.
For us, this means constantly
looking at how we can continue to
support underserved borrowers,
focusing on product innovation and
lobbying for further industry change.
My hope is that the increased
stability we’ve seen recently can be
maintained, allowing the industry to
keep the good work going. ●
