Recent volatility in the property market has put a strain on brokers' and their workloads, according to Michael Holden, divisional director of growth at Landmark Information Group.
Holden's comments follow the launch of Landmark’s Q1 Residential Property Trends report which demonstrated the extent of fluidity of the property market, specifically in reference to mortgage rates.
Holden explained that, with rates changing often, it means mortgage advisers are having to do extra work for every sale.
“If rates come back down during the homebuying period, which the likelihood is that they will, the customer is going to be going back to the broker and asking if they can get a better rate,” Holden explained.
He added the broker in question then has to rework the buyer’s case to get the offer at the new rate, and that could be happening any number of times for a new property purchase.
“Brokers are having to do more work for every transaction because of the greater volatility,” he said.
But Holden said there was “cause for optimism” in the property market.
Landmark's report found “some positive signs in the early stages of the property transactions” with Holding saying that listings and volumes “look pretty good” as they were up on 2019 levels.
Listings, on average, were 5 per cent higher than 2019 benchmark levels throughout the first quarter of 2024, an improvement on previous quarters where supply tracked the 2019 benchmark.
Holden also pointed out that inflation is continuing to come down and that the market is expecting a base rate decrease.
“When the base rate starts to come down, mortgages will become cheaper again and there is still demand out there for properties,” he added.
Finely balanced
Holden said the interesting aspect of the research was the discovery that the mortgage side of the market is “pretty finely balanced”.
He explained that, since the mini-Budget, there have been a couple of peaks and troughs of mortgage activity and that these rises and falls are tied to the price of mortgages.
“If you look at what happened post mini Budget lenders were all forced to put their rates up because the cost of borrowing increased, and we saw a pretty rapid cooling of the market,” he explained.
Holden stated that, over the course of the back end of 2022 and the start of 2023, mortgage rates slowly started to come back down which, in turn, stimulated activity in the market.
A similar decrease was observed over Christmas as “December saw some quite sharp reductions in swap rates”, meaning the market went into 2024 with “the best range of mortgage products available since the mini-Budget”.
“That fueled a lot of activity in the market as January and February looked pretty good from a year on year perspective certainly,” Holden added.
The research found the availability of competitively priced mortgage products increased in both January and February on a yearly basis, by 20 per cent and 15 per cent respectively.
