A mid-year mortgage market review – Duncombe

The end of quarter one also saw a spike of completions, as we saw borrowers rushing to beat the stamp duty deadline. However, arguably this served to bring forward completions that would have happened anyway – perhaps just a month or two later. We then saw a brief lull in demand – as borrowers who didn’t hit the deadline took a step back to understand what the implications of the changes might be.

Overall, though, this doesn’t seem to have deterred borrowers, and demand is still there, as the second quarter comes to a close. 

A difficult backdrop 

There’s no doubt that it’s been a tough few years for the housing market. With political turmoil from Brexit to Covid, to the cost-of-living crisis, followed by wars and conflict, changes of government, and more recently, economic events in the US, which have all brought uncertainty and concern. But what we can say is that the market has been resilient throughout – which is something we can all be proud of.

The market is a very different place compared to five years ago, and the cheap government funding for lenders after the credit crunch has now disappeared, taking with it the ultra-low mortgage rates we all got so used to. But the good news is that recently rates have been edging down, but towards a long-term reality that is probably nearer the 3.5% mark instead of the sub-2% rates that many got used to. And it’s unlikely to be a smooth glide path. 

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The value of advice 

The complexity and volatility of the current market demonstrates the value of the broker and how their need and worth have never been so strong. There is so much happening out there, and many customers just don’t know where to start, whether looking to get a mortgage for the first time or to remortgage.

Brokers can also help borrowers to understand that the decisions they make must be about their own individual circumstances at that point in time. Swap rates, which influence fixed mortgage rates, are very changeable – even on a daily basis – so waiting for rates to drop further may not be the best course of action.

Challenges for borrowers 

Last year, we saw many people struggling with their affordability, and stress rates were very high. In 2025, thankfully, some of those pressures have reduced, as lenders – ourselves included – have made changes to help lend more to more borrowers (meaning we can now lend approximately £35,000 more on average to the same borrower than last year).

At Accord, though, we’ve focused not only on challenges around affordability, but also on those around deposit, which are the two main issues faced by first-time buyers. That’s why we launched our £5k Deposit Mortgage last year, and in February, expanded the product to include flats, which helps tackle the challenge of raising a big-enough deposit, and has helped more than 1,200 people into their own home so far.

Other improvements we’ve made this year include increasing the loan to value (LTV) to 95% for new-build properties, and expanding our maximum loan size at 75% LTV and above to £2.6m. Changes like these are specifically designed to help under-served borrowers, and those who wish to get onto – or move up – the property ladder. 

Our other key area of focus is ensuring the best and most consistent service for our brokers through our business development managers (BDMs), and our fantastic business development adviser (BDA) team. To facilitate this, I’ve recently made changes to my leadership team – increasing it by two to 10, and giving three people responsibility for key business pillars, as well as enhancing the teams that work with them, to ensure outstanding support for brokers and clients. 

What’s next 

As for the rest of the year, we’ll be focusing on our strengths as a business – consistency of service, great case turnaround times, access to underwriters and a visible sales team – irrespective of market challenges.

We’ve been in the market for a long time and can always be relied on as a stable, trustworthy lender, but we will always look to innovate, especially in under-served markets, helping those who need it most. And there is always more to do – creating new innovative products – like the £5k Deposit Mortgage – and as well as other improvements – like changes we’ve made to our affordability model – so watch this space. 

As for the market, I have full confidence in its resilience, and the bottom line is that people still want to get onto the housing ladder. However, there are other challenges outside of our control. We’re still not building enough homes to meet demand, despite the government’s building targets. We need to see these delivered – otherwise, demand will outstrip supply, pushing up house prices. 

There are also suggestions that the regulator will look at the rules for lending to support more people onto the housing ladder; loan-to-income (LTI) cap limits is an area that could be addressed, for example. While that’s positive, and a move we support, this could create additional demand, so it’s all the more necessary to increase the supply of housing at the same time.

As we face into half two, we must work together as an industry to support the market – addressing challenges, facing threats and doing everything we can to help borrowers to achieve their homeownership dreams – but it’s a positive picture and I’m confident Accord will play a big part in supporting brokers to capitalise on the opportunities.