The mortgage market isn’t short of money or opportunity – it’s short of confidence – Phillips

Right now, there are plenty of reasons for uncertainty and hesitation. Inflation has moved higher and speculation around future interest rate movements only intensifies. And while GDP has proved to be pretty resilient in recent months, the stop-start conflict in the Middle East is adding volatility to an already unpredictable economic backdrop.

Yet look beyond all the negative headlines and narratives, and there are some reasons to be cheerful. 

We are seeing lenders compete for business. Despite the wider uncertainty causing interest rate increases, lenders are remaining in the market and tweaking their criteria. That is a clear sign for brokers and their customers. 

The simple truth is that lenders need to lend. They don’t make money by sitting on the sidelines. They make money by putting it to work, growing their mortgage books and completing business. That is especially true as big-name institutions continue to leave the high street and rely on the adviser community to secure new business. 

As we move towards the final months of the year, there is every reason to expect that appetite to remain – and I think September in particular will be a significant moment for the mortgage market. 

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The September market

For lenders, this will be a critical part of the year to get their pricing positioned for the months ahead. With transactions taking longer to progress, a mortgage agreed in September will just about complete by Christmas if all goes well – contributing to the end-of-year lending targets these lenders need to hit.

In short, to make sure they meet their targets, some lenders will need to shift the balance away from prudent pricing and more towards competitive rates. This, of course, creates opportunities for brokers. 

All too often, we talk down the market and look at it through the lens of what might happen next. Will inflation fall? Will swap rates destabilise? Will the base rate go up? What will happen in the next Budget? What about the geopolitical picture?

While all these questions do matter, none of them change the fact that there is still money in the market today. The real question is: do customers know this? 

If consumers hear enough about inflation, interest rates and economic uncertainty, it’s understandable that they might sit on their hands or think that lenders are pulling back. There will undoubtedly be those who think the mortgage market isn’t for them, despite never really investigating if that is truly the case. 

The broker plays a crucial role in cutting through the noise. Rather than letting a market be defined by a narrative, we need to demonstrate what is actually available and explain what it means for a customer and their individual circumstances. I’ve said before that the mortgage market needs to be like a buffet – offering something for everyone. Through innovation on product design and criteria, I think we’re doing a good job of that. 

We regularly see customers come through our doors thinking their dreams of homeownership were not possible – only to find out that today’s mortgage market has something to offer them. I have had pub conversations where someone tells me they don’t have enough deposit – not based on research or knowledge, but a gut feeling based on the narratives around them. They seem surprised when I talk about zero-deposit options or schemes like shared ownership.

We just need more potential buyers to ask the question. This is the opportunity brokers need to focus on, through their outreach, through their community engagement, through their digital shop windows. 

I’m not saying we have to pretend everything is super positive – we know that’s not the reality. I do think we should flip the narrative, though – away from uncertainty and towards opportunity and competition. 

While rates may remain volatile, lenders competing for business is good news for customers. It creates choice and gives brokers positive headlines to share and more conversations to have. It also means that, even in a market where sentiment is fragile and hesitation is commonplace, there are deals to be done. 

This is the type of market where brokers really need to dig deep and dig it out. Rather than being mortgage processors or order takers, we need to be proactive advisers. The ones who grasp this mindset and stay close to both clients and to lenders will be the ones sitting pretty at the end of the year. 

Lenders need to lend, and brokers have an important job in making sure customers know that. Call me an optimist, but I believe there are reasons to be cheerful. It just means looking in the right places.