Unsurprisingly, the top wish from 60 per cent of respondents was for a fall in interest rates. Sadly, this was not to be. 2023 opened with a Bank of England base rate of 3.5 per cent and we now – at the time of writing – sit at a level of 5.25 per cent.
However, the positive to take is that we have seen no further hikes since August.
In terms of what might happen next, the latest forecast from Capital Economics suggests that these will fall to around three per cent by late 2025. Meanwhile, analysts at Morgan Stanley have forecast that interest rates will be cut as soon as May and fall to 4.25 per cent by the end of 2024.
Seeking resolutions
Next on the wish list was the 17 per cent who hoped for the cladding dispute to be resolved. This remains something of a protracted work in progress, but a further webinar held in April showed that almost nine out of 10 property professionals believed that the latest Royal Institution of Chartered Surveyors (RICS) guidance on cladding has had a positive impact.
RICS issued the updated guidance for the valuation of multi-storey buildings in December 2022, which it said would bring clarity and confidence to the mortgage market.
Relevant and responsible solutions continue to emerge for everyone connected to this building safety nightmare and to further progress this important matter, it’s vital that we – as an industry – maintain a collective and transparent approach and this issue remains visible at the highest government levels. It’s certainly an issue that we will be following with interest in 2024.
This was followed by 13 per cent who coveted a deposit solution for first-time buyers with the launch of an alternative to Help to Buy commanding five per cent of responses. Although a rumoured stamp duty cut did not materialise in the recent Autumn Statement, an extension to the existing mortgage guarantee scheme until the end of June 2025 was announced to offer some ongoing support for first-time buyers.
Despite the Help to Buy scheme ending, there remain many responsible and appropriate solutions out there for first-time buyers, although it’s fair to say that not too much has changed in 2023 as ongoing issues around the raising of a deposit and ongoing affordability issues continue to quell the ambition of many first-time buyers.
Back to square one
Back to the wish list, three per cent demanded a delay in EPC regulation. In a recent review of the UK government’s policies, the well-publicised proposed introduction of increased Minimum Energy Efficiency Standards (MEES) for rental properties has been scrapped, leaving us with the current rules which set out that all let properties must have an EPC rating of at least band E.
However, landlords are still being encouraged to get their properties up to a C rating ‘where they can’ and there is still the possibility that this legislation could change again, especially with a General Election in the offing.
Finally, two per cent sought increased funding for lending. Some signs of economic stability over the second half of the year have helped solidify funding lines for many lenders with competition and lending appetites steadily rising throughout 2023. Let’s hope this continues into 2024, although the latest EY ITEM Club Outlook for Financial Services suggests that UK mortgage lending is expected to record decade-low growth in 2023 and 2024 as economic growth remains subdued and weakening housing market sentiment drives down demand.
Overall, mortgage loans in 2023 are expected to rise just 1.5 per cent (net) and two per cent (net) in 2024, representing the slowest growth in 10 years. Which represents disappointing but not entirely surprising news.
Bringing the surveying sector forward
From a Countrywide perspective, it’s been a busy year for our training academy after doubling the number of AssocRICS assessment qualification windows in a bid to get more residential surveyors certified and out into the industry.
We’ve also continued to raise awareness within the mortgage intermediary sector of the value of surveys and that all parties involved (estate agents, brokers, lenders and surveyors) have a duty to inform and educate customers on this matter. The percentage of home purchases that have a professional survey is still far too low in my opinion and the better and earlier informed purchasers are, surely any issues can be resolved quicker, and chains moved along more efficiently.
We have also made a number of key appointments, been awarded a silver medal by EcoVardis in recognition of our commitment to improving sustainability across our operations and, crucially, have partnered with CoreLogic UK on a surveying technology solution which will further enhance the lender and client valuation journey.
This is a partnership which is certainly helping us to make even smarter decisions throughout the business and gain the necessary support to develop a host of innovative and cost-effective data-driven solutions going forward.
And it’s key strategic partnerships like these which have continued to place us at the forefront of the ever-evolving survey and valuation industry over many years and this is a strategy which will continue into 2024.
