Q&A with Mark Hollands, what to expect from the mortgage market in 2023.

We asked leading industry figure Mark Hollands, Head of Sales and Distribution at Bluestone Mortgages, for his take on the future of the mortgage market.

1. What were the main challenges in the mortgage market in 2022?

Where to begin? 2022 was as close as you can get to a perfect storm. With inflation spiralling out of control, causing a cost-of-living crisis not seen for many years, we finally saw an end to the era of cheap borrowing as swap rates increased by up to 5% in 2021. This, coupled with strong house price growth over the last decade, has been a great challenge to many potential borrowers who, as a result, are unable to achieve their home ownership dreams as they fail to meet lenders’ affordability criteria. This issue is not expected to go away anytime soon as the Bank of England Base Rate is unlikely to have peaked, putting further strain on stress tests. Lenders will have to try to innovate and look at a range of options to ease the burden.

2. Is the market changing now that we have entered the New Year? What do you expect to happen in terms of interest rates?

Swap rates have stabilised since their peak after the mini-budget, which should give lenders confidence to reduce rates. However, swap rates are just one factor when determining product pricing. I expect that, in the short term, interest rates will gradually come down as long as there are no surprises around the corner in terms of the wider economy and the situation in Ukraine.

3. How can brokers put themselves in the best position to help customers secure the home they want in 2023?

Specialist Lenders are going to be more crucial than ever in 2023 as more and more potential homeowners fall outside of the risk profile of mainstream lenders. Whether that be due to age, complex income structures or adverse credit. Indeed one of the UK’s largest mortgage distributors recently reported a 58% uplift in Specialist Lender usage in 2022 from the previous year, and this trend is set to continue. 

It’s, therefore, more important than ever that brokers prepare for what is to come by speaking to their BDMs and educating themselves on how specialist lenders, like Bluestone, can help underserved customers achieve their home ownership dreams.

It’s also worth adding that the new build market and subsequently, options for first-time buyers have dramatically changed following the end of Help to Buy England as replacement schemes vary in structure and do not offer the same benefits as the Help to buy scheme. Spending some time to understand the new landscape will be key to helping first-time buyers through the fog.

If you’re wondering how you can serve a growing market of adverse cases but aren’t sure where to start – we can help. With times being tough for many people, we will work together to ensure your complex cases are packaged correctly, quality support is provided and the best possible client outcome is delivered. Give us a call on 0800 368 1833, or alternatively request a call back here.