Nearly three quarters of brokers unsure or worried about business prospects in year ahead

  • 27/07/2023
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Nearly three quarters of brokers unsure or worried about business prospects in year ahead
Around 67 per cent of brokers are unsure about the year ahead or worried about the prospects of their business, figures have shown.

According to research from Crystal Specialist Finance, which compares brokers expectations of the market from December 2022 to July 2023, this is down from 74 per cent of brokers at the tail-end of last year. The report said that this could show the “resilience of mortgage brokers and their adaption to the ongoing market turbulence becoming the ‘new norm’”.

The research added that more brokers were concerned about interest rate uncertainty as a key issue for their business, with 80 per cent of those surveyed in July pointing to it. This is an increase from 76 per cent at the tail end of last year.

The cost of living crisis as a key business factor fell to 66 per cent from 76 per cent. However, more brokers felt that customers lacked confidence, rising from 35 per cent to 40 per cent.


Base rate and buy to let

Brokers added that fewer landlords were prepared for upcoming EPC legislation, with 43 per cent saying landlords were not prepared, an increase from 30 per cent at the start of the year. However, 40 per cent of brokers said landlords were prepared, up from 30 per cent at the end of last year.

Around 40 per cent thought that the base rate would peak above six per cent, with 10 per cent thinking the ceiling will be 5.25 per cent. This compares to the start of the year when 54 per cent thought that the base rate would not hit five per cent.

Brokers are increasingly diversifying into new markets, with 27 per cent looking at bridging, 23 per cent at commercial finance and 20 per cent into buy to let. Approximately 67 per cent of brokers said they expected to diversify further during the rest of the year.

Over half of those surveyed at the start of the year expected to use a master broker, with that rising to 63 per cent at the half-year mark.


Brokers uncertain about 2023

Jo Breeden (pictured), managing director at Crystal Specialist Finance, said: “At the start of 2023, we were hoping for some form of stability with inflation coming under control and this being reflected in mortgage pricing and availability. Instead, we saw the opposite and it is only as we approach Q3 that inflation is falling – but not at the rate the Bank of England or the markets want to see.

“Our survey has revealed that brokers are still uncertain about the remainder of 2023, just as they were at the start of the year. That said, many have used the opportunity to diversify into new markets to bolster their businesses and I’m delighted to see the increasing importance of a master broker like Crystal in helping them achieve that.”

“While the wider residential housing market is in decline, this presents opportunities for the resilient broker that is prepared to investigate new markets – such as bridging, commercial finance and complex buy to let – where Crystal specialises. As ever, we will continue to provide our expert support as the industry faces into a challenging second half of the year.”

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