This year saw changes to the stamp duty tax, the Brexit vote and the Bank of England’s Base Rate cut to a historic 0.25% in August to settle post-Brexit jitters in the market. All of this was expected to have a detrimental impact on the market and customer confidence.
However, a poll run by Mortgage Solutions found 62% of brokers said they experienced an increase in mortgage applications, while 24% said they saw the same amount of business this year as they did last year. Meanwhile, only 13% of brokers said they saw a noticeable decline in mortgage completions.
Director of Coreco Group, Andrew Montlake, said he saw an increase in business volume in a year that saw so much uncertainty and put it down to customers taking full advantage of the low rates on offer.
He also suggested that no matter what happened economically or politically this year, customers were unphased and demand for property remained strong throughout.
“The fundamentals of why people move home were still there and always will be. People still needed to move house start a family or move to downsize because they got divorced. Life still went on even if the world seemed up in the air,” said Montlake.
He added he saw a strong comeback from the remortgage market on both buy-to-let and residential properties. Montlake said this was because many customers who were on two, three and five-year fixed rate products came to the end of their deal and naturally switched to higher variable rates.
This view of the market in 2016 was shared with Randal McLister, area director of Carrington Mortgages in Edinburgh. He also saw a rise in completions and said it was because customer demand for property was unshaken by this year’s market upheaval.
However, he also put it down to an increase in the buy-to-let business, dispelling any concerns the imminent tax changes issued by the Prudential Regulation Authority (PRA) had knocked customer confidence.
“Though we are based in Edinburgh, we continued to see interest from the South of the country for buy-to-let investment and it is still seen as a viable rental yield with relatively competitive price,” said McLister.
Neither Montlake or McLister said they were surprised by the increase as their mission for the year was always to grow, regardless of external market shifts.
“As a business we had plans to grow and you can only plan as you see fit. You can’t plan for a market you don’t know. If the market changes, you adapt and that is what we did,” said Montlake.
Looking ahead to 2017, McLister said he expected to see the volume of business continue to rise, citing the remortgage market as the area that would grow the most. He added he could see customers holding off from moving and opting to focus on home improvements instead.
Montlake was also optimistic for the year ahead and advised his peers there was still a lot of business for all brokers and that this trend would continue well into 2017.