UK Mortgage Industry: Brokers, Tips & Trends

In 2021, brokers in the UK intend to focus investment on digital technology and back-office processes, as well as team-building and developing strong workplace culture, says a United Trust Bank survey.

More than half of mortgage brokers in the UK missed their business targets last year during a period when the pandemic savaged enormous pieces of the UK economy.

Altogether, 54 percent of brokers said they had “somewhat” undershot their 2020 targets (30%) or “significantly” missed their objectives (24 percent), as per a survey by expert loan specialist United Trust Bank.

In any case, the review reports that 23 percent of agents say 2020 “surpassed” their assumptions.

UK house costs rose by six percent a year ago, as indicated by a Home Track report recently, yet the moneylender is foreseeing “descending pressing factor” on qualities in 2021.

The third lockdown is exacerbating a supply and demand imbalance in housing yet after the underlying stun of the worldwide wellbeing emergency, costs lifted in the second 50% of the year, prodded by stamp obligation occasions reported by chancellor Rishi Sunak last July. This move closes on 31 March.

In a United Trust Bank survey, 52 percent of brokers depict the year ahead as “challenging”, yet nearly so much, 44 percent, called it “exciting”. Four percent named it as “worrying”.

Mortgage Brokers – The Trends

Mortgage brokers act on behalf of lenders, primarily helping borrowers arrange mortgage finance for both residential and investment real estate purposes and refinance existing mortgages. Brokers receive commissions on loans arranged for lenders and may charge fees for their services.

Over the last five years through 2020-21, industry revenue is anticipated to increase at a compound annual rate of 2.7%. Industry growth has been driven by a rising number of residential property transactions stimulated by government initiatives, rising house prices, and low-interest rates. However, mortgage rates in the UK have come down in the last 5 years as well. As of March 2019, the average interest rates for a UK mortgage are 1.68% (two-year fixed-rate), 2% (three-year fixed-rate), 2.04% (five-year fixed-rate), 2.58% (10-year fixed-rate), and 1.6% (two-year variable).

Industry operators have faced numerous challenges, including downward pricing pressures from upstream lenders and a shift from commission-based earnings to income earned by flat fee income. In 2021, industry revenue is anticipated to increase by 3.2%, reaching £1.6 billion. After a standstill in residential real estate activity over the first quarter of 2020-21 due to the closure of the housing market during the lockdown imposed as a result of the COVID-19.

The third national lockdown has also created a perfect storm for the property market, with a slowdown in the flow of new supply for sale as demand rebounds.

Stamp Duty Changes

The UK government has announced that first-time buyers and home movers in England and Northern Ireland won’t pay stamp duty on the first £500,000 of the property value, from now until 31 March 2021.
If you’re currently thinking of buying, our calculator can tell you much you could save on stamp duty.

Mortgage Calculators

In case you’re putting something aside for your first home, planning for your next, or hoping to get a good deal on your current home loan, mortgage calculators focus on the UK market and beyond. The comprehensive online mortgage calculator shows the monthly interest only and repayment amounts on a mortgage with supporting graphs while giving insights on yearly capital and interest payments.

When to Apply for a Mortgage

Before you begin seeing properties, it’s a smart thought to get a home loan arrangement on a basic level from a moneylender or a few banks. This will give you a thought of the amount you can acquire and it will prove to estate agents you are serious about buying.

A few moneylenders will do a hard credit check for this – which at that point shows up on your credit record – so remember this while applying for an arrangement on a fundamental level. What’s more, if the home loan supplier completes a hard check, it’s best not to get multiple or two arrangements.

A few banks will run a delicate inquiry – and this will not influence your FICO assessment – so it’s a smart thought to check with every moneylender you contact prior to applying.

Your offer should last somewhere in the range of 30 and 90 days. Remember that this is just a gauge and is certainly not an ensured mortgage offer.

The Purchase Price of Your New Home

Having an idea of how much you can borrow will help you work out how much you can afford to pay for your new home, and should give you a better idea of your price range when it comes to viewing houses.
The actual mortgage loan you take out will then depend on how much you pay for the property, and whether you want to use any of your mortgage loan for making home improvements.
You should always make sure you’d be able to afford the monthly repayments before deciding whether to make an offer.