Recent UK and world events have left many markets reeling and confused. In many cases, this has resulted in people being reluctant to pursue careers within sectors that might be affected by national and international events. The recent general election along with last year’s vote to leave the European Union have created an atmosphere of uncertainty within UK financial sectors. However, there is evidence that in spite of this, the UK mortgage market is booming, with lots of scope for movement of talent within the sector. Estate Agent Today magazine suggests that the mortgage market has recovered almost to the level that it was before 2008, reporting that 30% of mortgage advisors were able to procure mortgages for “any client type” during the second half of 2016. This is double that of the first half of 2015.[i] In 2016 there were 9% more first time buyers in England then the previous year, with 5% more in Scotland, 7% in Northern Island and 11% in Wales. [ii] With regards to the amount lent, the UK mortgage market is the largest in Europe, currently worth £1.3 Trillion.[iii]
Fewer Buy-to-Let Properties giving more opportunity to first time buyers
It is true that with last year’s increase of stamp duty taxes for buy-to-let buyers, along with a reduction in tax breaks, landlords may be less inclined to buy. However, with lenders having fewer landlords wanting to borrow, they are likely to be keen to lend to other buyers. This will include first time buyers; a group who have been struggling to get on the housing ladder for a number of years. Many have been postponing buying through the past couple of years, but this has created what the Guardian describes as a “pent-up demand” among first time buyers. [iv] This may lead to competition for the purchase of some properties.
Brexit perhaps not as concerning as it first appeared?
While no one is really able to predict what Brexit will do to any market, the mortgage market is currently not showing much concern, with continuing low interest rates offered on mortgage loans. It is a great opportunity to re-mortgage at a point where interest rates are competitive and people are wise to shop around for the best deals, particularly using expert advice.
There has not yet been the predicted price drop on houses that many feared after the Brexit vote and now it looks as though that may be unlikely. Lots of people who had been putting off buying in order to wait for a price drop may now be feeling safe to start buying.
Excellent Interest Rates
Meanwhile, interest rates remain low, making it a perfect opportunity to get a mortgage, or re-mortgage at an extremely good rate. Chief economist of a major bank, Robert Gardner, suggests that there is more likely to be a small gain in house prices this year, than a decline – because of the low interest rates motivating a continued demand. [v]
Politics pushing the mortgage market forwards
“Interesting times” politically is not usually a good thing for markets that enjoy predictability. However, recent political events may work in the favour of the mortgage market. The Conservative manifesto promised to build a staggering 1.5 million new homes by the year 2022. This is a pledge that may appear impossible to fulfil, but they are under close scrutiny from critics and will doubtless strive to legislate for conditions that allow swifter house construction. Meanwhile, Labour is now a more significant opposition, and their desire to help first time buyers will also put pressure on the government. All in all, political pressures appear set to motivate a positive boost to the UK housing market.
Competition driving new customers
Earlier this year, one bank offered a staggering 1.29% loan on a five-year fixed mortgage. [vi] Though they renounced the offer after a huge response, it illustrates the massive competition in place amongst lenders. In addition, there are plenty of mortgages offered for first time buyers with only a 5% deposit – something that has been difficult to come by for a number of years. These competitive mortgages are attracting first time buyers, who will need help and advice with navigating their way through the overwhelming number of options.
Is now the right time to find your dream job?
While there is still some political uncertainty moving forwards towards 2020, this much is sure; people will always need houses. With disincentives for landlords and more and more help for first time buyers, along with a number of prospective buyers having stalled for a couple of years, it looks like now is a great time to position yourself strategically within the mortgage market. First time buyers and individuals pursuing the best re-mortgaging deals are likely to be looking for qualified, experienced assistance as they search for the best deals. We recommend speaking to a specialist mortgage recruitment consultant at Aston Charles to review your options and pursue your ideal career at this exciting time within the financial services market.
[i] Estate Agent Today. 2017. Mortgage market review.... [ONLINE] Available at: https://www.estateagenttoday.co.uk/features/2017/4/mortgage-market-review. [Accessed 21 July 2017].
[ii] Key UK mortgage facts - Council of Mortgage Lenders. 2017. Key UK mortgage facts - Council of Mortgage Lenders. [ONLINE] Available at: https://www.cml.org.uk/industry-data/key-uk-mortgage-facts/. [Accessed 21 July 2017].
[iii] Key UK mortgage facts - Council of Mortgage Lenders. 2017. Key UK mortgage facts - Council of Mortgage Lenders. [ONLINE] Available at: https://www.cml.org.uk/industry-data/key-uk-mortgage-facts/. [Accessed 21 July 2017].
[iv] The Guardian. 2017. Yes, house prices are falling: but they probably won’t fall quickly | Business | The Guardian. [ONLINE] Available at: https://www.theguardian.com/business/2017/jun/04/house-prices-falling-probably-wont-fall-quickly. [Accessed 21 July 2017].
[v] Mortgage Strategy. 2017. What are the headwinds facing the market in 2017? - Mortgage Strategy. [ONLINE] Available at: https://www.mortgagestrategy.co.uk/headwinds-facing-market-2017/. [Accessed 21 July 2017].
[vi] The Guardian. 2017. How to be on the winning side as mortgage war hots up | Money | The Guardian. [ONLINE] Available at: https://www.theguardian.com/money/2017/may/15/mortgage-rates-cheap-deals-buy-to-let-first-time-buyers. [Accessed 21 July 2017].