Blog: Entering 2024 – turning challenges into opportunities

The mortgage market has become increasingly complex and difficult for borrowers and brokers to navigate due to a number of factors.

The ongoing cost-of-living crisis combined with high interest rates is squeezing affordability, leaving two fifths of UK adults worse off by an average of £215 per month, compared to 12 months ago.  Additionally, advancements in technology mean that clients now expect and demand information at the click of a button.

However, this represents a significant opportunity for brokers to tune into their clients’ needs and position themselves as the helping hand who can guide them through these challenging times and help them achieve their homeownership goals.

Affordability Squeeze

Stubborn inflation coupled with the rising cost-of-living is having a significant impact on people’s homeownership ambitions, with many potential homebuyers finding it harder to save for a down payment or manage monthly mortgage payments.

Our own research found that nearly half (49%) of mortgage holders are concerned about the impact of the inflationary environment on monthly payment, while over a third (35%) of those looking to buy a home are worried about saving for a deposit.

Additionally, a third (33%) of all UK adults are apprehensive about how the current economic climate will impact their future homebuying prospects.

These constraints often eat away at their purchasing power, making it harder for brokers to write business while causing some clients to fall behind on their monthly expenses.

The latest figures from the Registry Trust reveal that the total number of judgments registered against consumers increased by 15.7%, from 193,670 in Q3 2022 to 224,152 in Q3 2023.

Specialist Support

As affordability challenges continue and a growing number of existing and would-be borrowers face financial difficulties, signposting will be more important than ever.

Setbacks such as missed payments can trigger high-street lenders to turn away a borrower because they don’t fit the traditional credit profile. However, this is where the specialist lending industry has a vital role to play. By adopting a manual approach to underwriting, we can base lending decisions built on customer needs and work with brokers to understand real affordability for people, even if they have struggled financially in the past.

Reece Beddall is sales and marketing at Bluestone Mortgages


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