Many mortgage market pundits are now trying to predict what will happen in 2015 and the overall volume of the mortgage market. Pre credit crunch figures amounted to gross mortgage lending of £363bn (2007). In 2013, it was circa £176bn. This year, it is estimated to be in the region of £200bn and many, including myself, think that 2015 will see an increase of around 12.5%, circa £225bn.
However positive this is, there are many concerns. Firstly, the number of lenders who have left the market for whatever reason, since the highs of 2007, have not yet been replaced. Neither have staffing levels within those who continued trading, but who downsized. As such, lenders are currently incurring delays given today’s volumes, let alone the large increase that is expected for next year. Secondly, it is a similar story for surveyors. Every property has to have a valuation completed and the surveyors are the eyes of the lender on mortgage transactions, confirming that each property provides suitable security for mortgage purposes. This is a complex and niche market and therefore takes time to train people to the relevant standard. Again, could this area of the market take on an increase of 12.5%?
There are many many other areas begging answers, but the bottom line is that lenders will need volume to meet their increased targets. With new lenders launching and an already quite saturated market, competition will be intense and aggressive and this can only be a good thing for the end consumer.
With this in mind, the quickest area for lenders to increase volume is in the re-mortgage market. With an estimated 400,000 customers coming to the end of their fixed or discounted rate periods between now and March 2015, lenders will be targeting this share of the market for quick business. Many lenders offer free valuations (normally a ‘drive by’ or automation) and free legals to attract new customers. If you’re one of those with a rate due to expire, now is probably a good time to shop around and you can start the process a few months in advance!