The 2015 mortgage market has been a tale of two halves, with the general election in May clearly causing consumers to be more cautious with their finances.
However, as spring turned into summer, the market as a whole became more prosperous and whatever dip we’d seen earlier in the year was soon forgotten.
In reality, this was only ever a slight dip anyway; it probably appeared worse than it was at the time, especially compared to the fast growth experienced in 2014.
Remortgaging also saw a slight drop in activity earlier this year, which was surprising.
Considering the fluctuation between standard variable rates and new business rates, 2015 was a great time to remortgage and take advantage of the rates on offer to secure the best deal possible.
There were signs that customers were waking up to that message later in the year, but 2016 needs to be the year of the remortgage – before base rates do eventually increase.
Regulation also dominated the headlines in 2015, largely due to the introduction of the Mortgage Credit Directive, which is due to come into force on 21 March 2016. As the year has progressed, it has become apparent that not all advisers are ready for the change.
During the mortgage and protection events that I hosted around the country this year, we wanted to address the challenges that brokers will face in this area and make sure that they were prepared for these changes.
To this end, we created a Mortgage Credit Directive Matrix that brokers can use to familiarise themselves with details of the directive and make sure they are compliant. After all, if advisers do not thoroughly understand the changes, customers won’t either.
It was also another year of unprecedented record low interest rates, with no clear idea of when they may rise again.
As such, it is important that anyone who is coming to the end of their mortgage deal or who is currently on their lender’s SVR should talk to a broker now to look at what other products may be available before rates start to rise.
The newly extended Help to Buy scheme in London should help the market recover and does demonstrate that the government is taking a proactive approach to the housing crisis. However, there is still a danger that it will just increase demand, rather than addressing the supply issue.
In the Autumn Statement, we also saw a change to buy-to-let stamp duty, with the charge rising by 3 per cent. The effect of this change on the market is currently unknown.
We can, however, predict that there could be a rush for buy-to-let owners to complete on their properties before the new charge comes into force in April 2016. Coupled with changes to taxation, the shape of the market could start to change.
The year 2016 should be another good year for advisers, with but with MCD, BTL and remortgage all dominating the headlines, intermediaries need to ensure they keep up with the changes to ensure they are providing the best possible service for customers.
Jeremy Duncombe is the director of Legal & General’s Mortgage Club
