One big bump
The one obvious shock to the UK economic environment this year was Brexit. The referendum result did not cause the ‘doom and gloom’ predicted by many. However, Brexit was a shock to the system, and uncertainty about the UK’s economic outlook continues.
Amid the ongoing uncertainty, the mortgage market has remained resilient, but it is likely that consumers will sit tight into 2017. With rates unlikely to fall further, and some forecasts even predicting a hike in the base rate, it’s important that the industry continues to provide great value deals to consumers and drive remortgage activity in the new year. Lenders and brokers alike must also prepare ahead for further bumps in the road next year, particularly once Article 50 is triggered.
Lending for real life
The popularity of the ‘gig’ economy continues to grow, and the mortgage market has also responded to meet the demands of this growing workforce. The changing face of Britain’s workforce represents a huge opportunity for specialist lenders, with a record 4.8 million people now self-employed. Business owners, contract workers and those with multiple income streams will all be seeking a mortgage solution that is appropriate to their circumstances.
The specialist lending market is responding to these trends by recognising the real life circumstances of many of these borrowers. Whether it be high value loans or new build mortgages, brokers are increasingly talking to their self-employed and contractor clients about specialist lending solutions, recommending products that take into account a borrower’s individual circumstances to meet their mortgage needs. This is a positive move that will create a fair mortgage market for all, as more borrowers with complex circumstances are now able to access products which previously only prime customers enjoyed.
Though the rise of this gig economy is a trend that we will continue to see next year, prevailing uncertainty will likely mean 2017 will be a flat year for volume growth. The competition will be high, but The Northview Group and its lending brands Kensington and New Street will be continuing this support for our intermediary partners, with plans to launch a number of new products in the coming months.
Back to buy to let
The buy-to-let sector has seen rapid change this year. April’s stamp duty rise on second homes brought a rush in buy-to-let lending in March, as borrowers looked to complete their property transactions to avoid the 3% tax. Lending consequently slowed shortly after, and buy-to-let activity has remained subdued in recent months.
Now the market faces further changes as the PRA’s revision of underwriting standards comes into effect in January. As a result, we expect to see considerable change in the products available to this sector in 2017. That means the launch of new products to target key segments of the market and provide much needed finance to landlords, whether they be professionals with a portfolio or those who wish to rent out their property to multiple occupants.
Just like 2016, 2017 will be another step change year for the buy-to-let market, with lenders focused on adapting their product offering to meet the changing needs of landlords. At The Northview Group we will be listening to intermediaries to ensure our products remain relevant to customers in a market in transition.