With 2024 in the rearview mirror, we certainly have plenty to reflect on. While last year saw big political events, the mortgage market remained strong and borrower confidence continued to grow. There may be hurdles to overcome in 2025, but I’m genuinely excited for the year ahead – there is much to look forward to.
A clear horizon
Last year was a busy year for remortgaging, as the two-year fixed mortgages impacted by Liz Truss’ tenure began to mature. But the advice community came together, working hand in glove with lenders and clubs to deliver tailored and positive outcomes for customers.
The horizon for this year is looking clearer too. The Autumn Budget clarified a lot of uncertainties, and our market came through two major elections on both sides of the pond. Whilst challenges remain and the current environment remains volatile, I have no doubt that our advice community will rise to the occasion and help their customers find the best possible deals.
Don’t always believe the headlines
Some of our customers will make up their minds about the mortgage market based on what they read in the papers. But as mortgage professionals, the adviser community shouldn’t let a few headlines and short-term reactions to the smallest bit of economic news cloud judgements and influence expectations. Inflation dropped in 2024, and the Bank of England made two base rate reductions. And while it is possible that recent market volatility is challenging some of the late 2024 predictions for future cuts, the likelihood of further cuts in 2025 remains very high.
Right now, the general feeling is that business and market activity is on the up. I speak to a wide spectrum of people, including estate agents, surveyors, and economists, and what I’m hearing is a mood of general positivity – the ONS, Savills, and OBR are all in agreement that market activity is on an upward trajectory. Searches on our Ignite system are also showing significant increases in January
At Legal & General Mortgage Club, the positive sentiment is the same. In October, we recorded our biggest week ever, followed by our largest ever month in November. This all led to 2024 breaking lending records too – a fantastic achievement and a credit to our adviser partners.
How can the market set itself up for a positive 2025?
The new government’s housebuilding pledge was welcome news for our market, which will gain much from a supply-side stimulus. We have seen a lot of demand-side stimulus in recent years, with the stamp duty holiday deadline spurring buyers to seize their chance. But in my view, a boost to housing supply may go far in keeping a good balance between healthy market activity and house price growth.
We must consider all the options to drive the market forward. For example, it’s important that we find ways to transform UK homeownership from an illiquid asset to a liquid asset. The average home move in the UK can take five or six months, while in Australia, a person can get the keys to their new home in less than 30 days.
There is a genuine economic interest in getting Britain moving, as it will make the process seem far less intimidating to aspiring first-time buyers and regular home movers alike if we focus efforts in this area going forward.
Final words
January is always bittersweet, the dials reset to zero and it sometimes feels daunting as we face into having to go and do it all again. However, we can look forward with positivity, both UK Finance and IMLA are predicting a larger mortgage market for this year and the market feels swollen with pent-up demand. A busy Q1 could be on the cards noting the upcoming stamp duty changes. And throughout 2025 we can look forward to the largest cessation year for fixed term mortgages with a reported £385bn in mortgages coming to an end. This could mean that product transfers overtake standard remortgaging and purchase deals this year, so there are some real opportunities out there – if we are ready to seize them.
As ever, it remains important that we work ‘on’ our businesses, not just ‘in’ our businesses. Investing in ourselves first and foremost is something to keep in mind as it gets busy again. Staying curious with technology can also unlock growth through better sourcing systems, faster underwriting, and more time for you to do what you do best – speaking to and advising your clients.
So, let’s get ahead while we can -the economic fundamentals are strong.
Kevin Roberts is managing director, Legal & General Mortgage Services
