Hello, and welcome to the final edition of Paradigm’s quarterly newsletter for 2024! So how was 2024 for you and your business? As ever in the mortgage world, it seems change is the only constant, and 2024 has been no different - with a plethora of new initiatives and policies from the now notso-new Government that will likely impact your business, your clients and your advice processes, alongside regulatory issues and the wider economy. If you take the housing arena alone, there are proposed new planning laws, new build quotas, stamp duty changes coming in at the end of March 2025, changes to second home stamp duty, the Renters Rights Bill, to name but a few. If you then add in what now appears to be consistent FCA reviews on the impact of Consumer Duty the Protection market review and the other areas of oversight, and you have yet more change and challenge in our market which in turn may impact your business. Finally, we can’t ignore the wider issues in the UK and world economy, and the areas that concern us. Namely; inflation, the Bank base rate, the new National Insurance rates which will come into effect in Q2 2025 and the impact this could potentially have on wage growth, employment levels and general business health, the wider geopolitical matters from the Middle East to Ukraine, plus the small matter of the “Donald” taking his seat in the White House! All of this combined is enough, as REO Speedwagon sang in their famous song ‘Roll with the Changes’, to adopt the maxim of “turn some pages, I'll be here when you are ready, to roll with the changes”. And that’s really all that we can do, roll with the changes. I have never liked the phrase “it is what it is” - I think it hides from the truth or of taking action - but given the above, I can’t help but think maybe that’s all we can do! I don’t think 2025 will see any slowdown in change, especially if we add in to the above listed events to those events/issues which have not yet happened! As Harold McMillan so famously said when asked what the greatest challenge for a statesman was, he replied: ‘Events, dear boy, events’; that will adequately sum up our market perhaps. It appears the housing and lending market is in a good shape overall as we end the year. Data from Lenders shows the market running at circa £6bn per week in residential applications, with BTL running at a more modest £750m per week. What is noticeable, and very important, is the First Time Buyer (FTB) market which continues to experience the fastest growth against the three buyer types in the residential area - without the FTB, there is no market. Mortgage approvals have risen by 20% during 2024, and housing transactions have increased by 10%, with house prices returning to pre-pandemic levels. There also appears to be an expectation for interest rates to settle at 3.5% to 4% over the medium term, which is leading many commentators to suggest the overall levels of mortgage lending and housing market activity will strengthen further in 2025 and 2026 which is great news. The good news continues when seeing that Richard Howes Director of Mortgages Paradigm Mortgage Market Update 04 WINTER MORTGAGE NEWSLETTER
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