Hello, and welcome to our third quarterly newsletter for the year! As usual, we have tried to fill this edition with informative and educational articles which hopefully get you thinking about areas which could help you to grow your business and consider different opportunities. Obviously, as we enter Q3 the ‘big push’ is on from Lenders to secure business for either a good finish to 2024 or to give them a head start in 2025. This is good news for the market and for borrowers, as the Bank of England appear to have played their part with the recent base rate cut - with perhaps one more to follow giving confidence to borrowers and Lenders alike, and after all the housing market is predicated on confidence, so this must be a good thing. Such confidence appears to be reflected in house prices too; they are forecast to rise by 2.5% this year on the back of the recent bank rate cut if further reductions follow, according to Savills. UK house prices rose by an average of 2.7%, to £288,000, in the year to June, according to the Office for National Statistics (ONS). This was unchanged from the 12 months to May, and was the fourth month in a row with an annual increase in prices, following eight months of annual falls in prices. There is plenty to consider in the market currently, one area that caught my eye was the recent information on adviser income; reported revenue from regulated mortgage broking fell 13% from £1.58bn in 2022 to £1.37bn last year, data from the FCA showed. The FCA’s retail intermediary market data for 2023 showed that the commission earned from mortgage business amounted to £1.06bn, down from £1.23bn in 2022. The FCA data showed this was across 4,104 firms, compared to 4,277 businesses transacting mortgages in 2022. So its been a tough year compared to the previous halcyon days, and I would suggest a reason for the drop in income is the Product Transfer (PT) market which sees advisers doing the ‘right thing’ by their clients, but paying a heavy price for it by several of our lending partners whose remuneration strategy seems to be to ignore the commercial realities of their main distribution source for lending. PTs are very topical currently, given those who took out 2 year products just after the now infamous Truss budget will be coming up for renewal, and the good news is the rates will be lower for them ironically. But also as the PT market next year according to CACI’s data could be in the region of £400 million. The BTL market is front and centre of this as well, according to research from Foundation Home Loans in their Q2 2024 ‘Landlord Trends’ report, a third of landlords are planning to remortgage or go through a PT in the next 12 months. In fact, the survey indicated that landlords are expecting to refinance around two-and-a-half deals on average; within those that are refinancing, 38% have one mortgage to refinance, 34% have two deals due to refinance, 12% have three products, 8% have four deals and 7% have over five mortgages maturing. Foundation Home Loans said that landlords have £654,000 in total on average, equal to around £125,000 per BTL mortgage. Indeed, the whole proc fee area is fascinating when you start to look at it. In many recent meetings, our CEO Bob Hunt has been championing greater transparency in terms of network and mortgage club proc fees, and Richard Howes Director of Mortgages Paradigm Mortgage Market Update 04 AUTUMN MORTGAGE NEWSLETTER
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