Emerging from the turbulent mortgage market seen in the latter part of 2022 into a calmer start for 2023 will be a welcome reprieve for many lenders, conveyancers and brokers.
The autumn/winter rush to re-mortgage and secure favourable rates, spurred by last September’s ill-fated mini budget, has slowed into a gentler hum of activity while lenders reassess their appetites in today’s higher interest rate environment. However, the dip will not last for long.
Lenders, conveyancers and brokers all had to come to terms with almost unprecedented volatility in 2022. Lessons learned during that time have created a greater drive towards improving our market and the way we serve consumers. Firms across the industry now have an opportunity to use this quieter time to ensure their operations are set up for success ahead of the busy summer months to come.
No easy ride into 2023
We’ve seen the need for a smoother, more efficient conveyancing system to benefit both consumers and an industry impacted by external events. The turmoil seen in the mortgage market in the second half of 2022, combined with a rapidly deteriorating economic backdrop and the cost of living increase has crystalised the benefits of consumers being able to secure new products quickly, seamlessly and transparently.
We are not going to see this abate in 2023. Interest rates are predicted to continue to rise, taking mortgage repayments with them. As consumers face increasing financial pressure, we will see more looking to shop around when re-mortgaging. Equally, those who took out a two-year fixed rate mortgage in the 2021 to take advantage of the temporary reduction in stamp duty will be adding to the demand. This is going to put a strain on capacity in the market as it currently stands.
Collaboration is the key
It will be through increased collaboration across the mortgage sector, and by embracing technological innovation as best practice that will ensure peaks in demand for mortgage completions can be more easily managed going forward. Greater efficiencies will improve market capacity and, therefore, customer outcomes.
2023 has the potential to be a year of progress towards a better and more resilient conveyancing and mortgage market. We are going to see a greater focus on Consumer Duty and moves to support better customer outcomes; one lender has already dropped transfer fees and we hope more will take bold steps to follow suit.
Driving innovation forward
Central to this needs to be embracing technological innovation. Experience tells us that cutting through the labyrinthine processes that slow transaction settlements is not only good for business but can improve mental health. By removing the unnecessary, often manual, administration involved in sale/purchase and re-mortgage transactions, workloads and timelines shrink for service providers and their customers alike. More time to complete work at a reasonable pace and keep customers informed equals less stress for all.
To achieve this ideal, collaboration among industry bodies and practitioners will be key. To name just a few, , the Conveyancing Association, the Building Societies Association and the Payments Association are doing great work to champion the success of the industry. Membership bodies like UK Finance, techUK and the Bold Legal Group provide essential support to drive innovation. The benefits of driving positive change are clear, but we can only do so if we work together.