Blog

Kicking off the year

Bob Hunt

Bob Hunt

13 January 2022
No sooner had the working year kicked off than we got our first set of industry data to chew over – this time in the form of the Bank of England’s Money and Credit statistics.

The data covers November last year but, specifically in the form of rates on ‘newly-drawn mortgages‘, net borrowing and mortgage approval numbers, it gives us insight into where the market is likely to move in the early months of this year.

In the month before the MPC acted to raise Bank Base Rate to 0.25%, rates on newly-drawn mortgages fell by nine basis points while outstanding rates dropped by one point.

It shows a direction of travel for rates southwards, and it will be interesting to see whether the MPC decision does move the compass point in the months ahead. My own view is that it’s unlikely to shift it dramatically, if at all.

Even with the anticipation of BBR continuing to be inched upwards, I think we have an ultra-competitive marketplace which requires lenders to be constantly mindful of where they are on price.

Also, given we are at the start of the year, the need to hit the ground running, to ensure pipelines are full, and to secure business early doors, means that it feels unlikely we’ll see many lenders looking to increase rates significantly.

That clearly bodes well for advisers, and their clients, particularly those wanting to remortgage in 2022. The noise around the market for 2022 is that remortgage business could/should be plentiful and will drive many intermediary’s mortgage activity – low rates will undoubtedly help advisers push the message to existing borrowers that now is a good time to be renewing their loans, either through a remo or PT.

Net borrowing in November hit £3.7bn, up significantly on October’s £1.1bn, and while mortgage approval numbers for house purchase were around the same 67,000 number as the month previous, remortgage approvals were up – moving from 41,978 to 44,529, again cementing the point that we could be seeing far greater parity in the months ahead than we did in a predominantly purchase-focused 2021.

It will therefore not need me to say that advisory firms will need to focus particularly carefully on existing clients coming to the end of their special deals, and existing borrowers who might want to borrow more and are therefore looking for advice to remortgage away from where they currently sit.

PTs are always likely to take a large share of business, but in a world where homeowners might be looking to take advantage of increased property values, and where a changing work/life balance may require changes to existing homes, advisers should have an opportunity to secure some excellent deals for those who want further advances/larger loans in order to make home improvements.

I’ve noticed in recent weeks some commentary around the BBR increase which suggests borrowers have ‘missed the boat‘ when it comes to securing low mortgage rates.

As we all know, rates are always based on a moment in time. Yes, some of the low rates of September and October are gone, but there are still excellent deals to be had right across the board.

Given the money they have to lend, the need for them to lend it, and the competition in the sector, lenders are not going to rest on their laurels or price themselves out of the market, especially when it comes to borrowers with a strong track record and a need to remortgage.

Advisers have an excellent opportunity here to lead the remortgage charge and I have no doubt you will take it.

Reading this blog counts towards your CPD!

Click here to add this session to your Paradigm CPD log.


19 December 2024

Housing Market: 2025 Outlook


28 November 2024

Suppressing landlord activity won’t automatically improve first-time buyer prospects


25 November 2024

The Co-operative Bank for Intermediaries, streamlining processes and expanding product ranges


21 November 2024

Better off dead? The need for critical illness cover


18 November 2024

What the OBR’s five year forecasts mean for the market


11 November 2024

Exploring the latest in Defaqto Engage: A comprehensive roundup of new features and enhancements.


25 October 2024

Advisers should rethink their regulatory status to keep up with sector changes


16 October 2024

Your Business Matters


7 October 2024

What may impact BTL and Resi markets in 2025?


1 October 2024

Why Gen Z could be the perfect match for protection


30 September 2024

Self-employed mortgages can be easy, if you choose the right lender


26 September 2024

Lenders and regulators must be careful not to add to adviser disillusion


19 September 2024

There may be trouble ahead…


2 September 2024

Source Go: The Modern Answer to the GI Question


29 August 2024

Pre- and post-mini Budget remortgagors need guidance in transformed market


23 August 2024

Guardian's 2023 claims report: a milestone worth celebrating


14 August 2024

Rate cuts are a positive story for advisers


7 August 2024

Mind the gap (s)...


1 August 2024

The mortgage market is set for a teeming H2


29 July 2024

Aldermore are backing more of your clients to go for it


22 July 2024

YOU SAID, WE DID!


12 July 2024

A surge of optimism for the market


9 July 2024

Distribution of Wealth


3 July 2024

Consumer Duty one year on – what might happen next?


24 June 2024

How to increase your protection business


17 June 2024

Consumer Duty will mark new era of continuously changing advice


6 June 2024

Mental Health Matters: Workplace Wellbeing


21 May 2024

Advise or refer? Ensuring the best possible outcomes for your clients


15 May 2024

Darlington Criteria Updates


14 May 2024

And The Wait Goes On


10 May 2024

Cap on broker fees sparks industry debate


1 May 2024

Expect the unexpected


15 April 2024

Ready, set, remortgage!


12 April 2024

How the mortgage market is failing new arrivals to the UK


11 April 2024

A compliance refresh will lighten unavoidable market stress


4 April 2024

What is driving the Specialist Residential and Buy-to-Let markets this year?


4 April 2024

A Government that prioritises owner occupiers at the expense of the PRS


28 March 2024

What is your website for?


19 March 2024

Exploring the value of value added benefits


4 March 2024

Artificial intelligence – friend or foe to advisers?


21 February 2024

RESTRICTIONS LIFTED?


9 February 2024

Trust your own gut when listening to market predictions


7 February 2024

Strategic thinking - Is this time for a new look at how we work as a business?


8 January 2024

The Name's Bond...


Paradigm

THIS SITE IS FOR PROFESSIONAL INTERMEDIARY USE ONLY AND NOT FOR USE BY THE GENERAL PUBLIC.

APCC MemberConsumer Duty Alliance

Paradigm Consulting is a Member of the Association of Professional Compliance Consultants and also the Consumer Duty Alliance.

Paradigm Consulting is a trading name of Paradigm Partners Ltd
Office address: Paradigm Partners Ltd, Paradigm House, Brooke Court, Wilmslow, Cheshire, SK9 3ND
Paradigm Partners Ltd is registered in England and Wales. No.09902499. Registered Office: As above

Paradigm Mortgage Services LLP
Office address: 1310 Solihull Parkway, Birmingham Business Park, Birmingham B37 7YB
Registered in England and Wales. Company No: OC323403. Registered Office: Paradigm House, Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND
Paradigm Mortgage Services LLP is a Limited Liability Partnership.

Paradigm Protect is a trading name of Paradigm Mortgage Services LLP
Office address: 1310 Solihull Parkway, Birmingham Business Park, Birmingham B37 7YB
Paradigm Mortgage Services LLP is registered in England and Wales. Company No: OC323403. Registered Office: Paradigm House, Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND
Paradigm Mortgage Services LLP is a Limited Liability Partnership.