Industry experts debate whether things are improving
Is the tide turning in the world of mortgages? Can lenders and brokers breathe a sigh of relief at what may be the green shoots of a recovery? As someone who arrived fresh faced (kind of) into the market, in September 2022, to write for Mortgage Introducer - at pretty much the same time that Liz Truss walked into Downing Street as Prime Minister - it’s certainly felt like a tumultuous few years. Within weeks, the mini-budget happened, sending rates sky rocketing, and it’s been eventful ever since.
News that mortgage approvals for house purchases in the UK increased by 900 to 64,200 in June, according to the latest Bank of England Money and Credit data, could be an encouraging sign that the storm clouds are finally retreating. Approvals for remortgaging with a different lender also rose, up by 200 to 41,800, marking the highest level since October 2022. There’s also an expectation that the Bank of England will make a further cut to the base rate when it meets again next Thursday, August 7. And still, mortgage rates continue to fall – with Nationwide Building Society among the latest lenders to lower rates.
Michelle Lawson (pictured left), director of Lawson Financial, seems cautiously optimistic. “June and July have been exceptionally busy months for us compared to recent times, which is encouraging,” Lawson said. “Some of these customers are coming out of Liz Truss times and others are a real mixed bag of purchase, remortgage and investors buying and refinancing. It’s great that rates are coming down, a Bank base rate reduction is highly likely, and lenders have adjusted affordability, but the costs of buying following the end of the stamp duty incentive is the elephant in the room and adds significant costs.”
She added: “I’m forever hopeful of more of a spark as properties are taking a lot longer to sell. People need an incentive to move and the housing market is the ignition to so many other industries like retail, removals and trades. Someone needs to flip the switch and put a lot more confidence in the chain starters.”
Graham McClelland (pictured second from left), CEO of lender Gen H is upbeat. “I am excited about the market at the moment,” he said. “We appear to have some positive momentum - lower rates, a prospect of further reductions, and volumes slowly starting to pick up. We have had a great July - our best ever month for this time of year – plus we have positive moves from lenders and the regulator with regards to loan-to-income ratios and affordability.”
He continued: “Borrowers have more products and choice and it is still a buyers’ market out there - in other words, a good time to be house hunting. These opportunities tend to be short-lived, and I could certainly see house prices starting to move if this continues. The only negative is that the amount of true innovation remains limited, but at least that creates opportunities.”
Matt Towe (pictured second from right), co-founder of the brokerage Meet Margo is certainly encouraged too. “We’re feeling increasingly positive about the direction the market is heading,” Towe commented. “There’s a clear rise in both enquiries and approvals, pointing to a return in consumer confidence. Recent rate cuts from lenders like Nationwide are a strong signal, particularly for first-time buyers and clients coming off two-year fixed products taken out during the 2023 rate spike. For many, the move toward more competitive pricing is a welcome relief.” He added: “If the Bank of England follows through with a potential base rate cut in August, we expect that momentum to build further, creating a more active and accessible market in the months ahead.”
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Difficult to be positive
Broker Luther Yeates (pictured right), head of mortgages at Orton Financial, remains unconvinced, though, that the ground truly is shifting for the mortgage market. “It is very difficult to be positive about the future given the economic indicators we are seeing,” he reasoned. “Property prices are falling, debt is still relatively expensive, and the Government is on track to raise additional taxes on the economy. We are already in a recession, there just seems to be an unwillingness to accept the current state of the market.” Yeates added: “I hope to see a thriving market in the future, and hope the Government and Bank of England take the time to reflect upon what has caused such a dire situation.”
Anne-Marie Blackler (pictured inset, above), mortgage adviser at Prestige Private Finance, has mixed views on the current mortgage market, but is leaning towards optimism. “Prices have softened enough to create genuine opportunities for buyers,” she said. “Many now have real choice, which is refreshing after the tighter conditions of previous years. While the stamp duty relief and government tax changes have undeniably impacted sentiment, especially among overseas investors, I believe this softer pricing is exactly what many buyers have been waiting for.
“In fact, when you weigh up the savings from stamp duty relief versus the chance to secure a better, more affordable property, I think most would prefer the latter. I’m seeing no shortage of buyers in certain areas, and while the prime market has slowed, activity is picking up in pockets across the UK. Rates are currently lower than we’ve seen in a while, and lenders are more open to lending, which only boosts confidence. If sentiment continues to improve, I expect to see an uptick in transactions in the coming months.”
Jessica Reehal (pictured inset, above), specialist mortgage broker at London Mortgage Solutions, believes there are reasons to be cheerful. “I truly believe in the market and remain positive about where it’s heading,” she said. “Yes, the Bank of England rate has risen, but what goes up, must come down. I always tell my customers, ‘Rates are rates.’ Watching the market and waiting for the perfect time is usually a waste. It’s better to jump in and get involved than stand on the sidelines watching others build.” She added: “Property remains one of the most powerful ways to grow wealth. Don’t wait for conditions to be perfect - take action.”
Meanwhile, John Phillips (pictured inset, above), CEO of Just Mortgages, is greeting another monthly increase in mortgage approvals positively, even if it’s only marginal. “It’s encouraging to see some momentum building in the mortgage market, with prospective buyers and movers buoyed by ever-growing innovation among lenders and an increasing spotlight on improving affordability and access to new mortgages,” Phillips said. “Although the jury may still be out on its decision, all eyes will be on the MPC meeting next month and whether we see another cut to the base rate.”
He added: “Remortgage activity now at its highest level since 2022 certainly reflects what our brokers are seeing on the ground. We knew 2025 would be a busy year for mortgage maturity, whether it’s those facing a rate shock from COVID-era deals ending, or rate relief from deals chosen in the wake of the mini-budget. It’s a reminder to all brokers of the leg work required to get back in touch with clients and encourage them to explore their options in good time – especially in a market that has seen so much change since those deals were first taken.”
