As was widely predicted, the property market has slowed in the first quarter of this year as rising costs and economic uncertainty have combined to dissuade people from moving home or taking their first step onto the housing ladder.
According to official data from HMRC, UK property transactions were down 18 per cent in February from the same month last year and four per cent lower than January. HMRC says these are the worst February figures in a decade.
It’s not all doom and gloom, however. The Office for Budget Responsibility (OBR) has said the UK will avoid recession this year, and there is greater economic stability on the horizon. Broker businesses are also being bolstered by a huge demand for remortgages and this March saw the highest ever volume of remortgage searches in a single month, according to Twenty7tec.
A lot has happened in the last five years – not least the Covid pandemic and cost of living crisis putting strain on household finances – so there’s a good chance that many of your clients may now have more complex circumstances than they did last time you arranged a mortgage for them.
The number of people with missed payments on their credit record is growing, as is the number of people choosing to earn their income through self-employment. Even for established small businesses, Covid and multiple national lockdowns suppressed earnings over a couple of years, and many more self-employed people are now looking for a lender that is able to base affordability calculations on their latest year’s accounts.
The good news is that the number of competitive remortgage options in the specialist market is growing and brokers have more options to place their remortgage clients with the right deal for their circumstances.
At Brightstar, we are seeing more product propositions come to market to help remortgage customers even if they want to borrow at high loan to value (LTV) tiers, have recent adverse or are looking to raise capital for debt consolidation when they refinance
For example, we are currently working with one lender that allows adverse credit and offers remortgages up to 90 per cent LTV, with the broker fee and the product fee both being able to be added to the loan above this amount, with no interest charged on either. The same lender can also lend up to 85 per cent LTV to customers with recently settled individual voluntary agreement (IVA). There are plenty of options.
When it comes to a remortgage, speed is often of the essence if a client is approaching having to pay their lender’s standard variable rate (SVR) and this is particularly true in the specialist market. Choosing the right lender, that is able to deliver on service as well as criteria is important and, if you are not familiar with this part of the market, the best way to engage with it in confidence is to work with a specialist distributor.
The future may be looking brighter, but demand for remortgages is booming now, so it’s important that you are best placed to help your clients refinance to their next deal, whatever their circumstances.
Written by Gina Blagden, Head of Sales.
