An Enormous Refinancing Opportunity

NEWS FROM HLP

An Enormous Refinancing Opportunity

Residential Remortgage Opportunities The coming 18 months are set to see huge opportunity in the remortgage market. By the end of 2022, £328 billion worth of fixed rate mortgages will have come to an end, and £205 billion in product transfers are expected to have taken place.

With Bank of England interest rates potentially set to top 4% in 2023, the opportunity increases further, as many households look to remortgage to secure a stable rate for the years ahead. Analysts forecast the value of product transfers to reach £276 billion next year.

The value of residential property remains buoyant as house values across the country continue to rise, with no prediction of a market downturn. The intermediary sector continues to take the lion’s share of the market with 80% of mortgages arranged through advisers.

Lenders typically contact clients 3-4 months ahead of their remortgage being due, and Mortgage Solutions data shows that advisers lose 60% of their clients to direct lender channels at time of remortgage. To combat this, be proactive and stay ahead of the game, keep engaged with your clients through regular marketing communications and build that relationship early to ensure that you are the first point of call for when it’s time for a remortgage.

Buy-to-Let Remortgage Opportunities With over 8 million privately rented homes in the UK market and increasing levels of monthly Buy-to-Let (BTL) gross lending during 2022, the opportunities in this sector are becoming even larger.

Data from UK Finance indicates that levels of remortgaging in the BTL sector have increased significantly this year compared to 2021 data, and Oxford Economics forecast growth rates of 9.4% by 2027, with gross mortgage advances potentially reaching between £50bn-£80bn in the five-year period.

It’s certainly a time of growth in remortgaging, as BTL landlords seek greater security in longerterm mortgages to combat rate rises, with fiveyear fixed deals becoming increasingly popular, according to findings by Foundation Home Loans.

Furthermore, environmental regulatory pressures are set to impact the BTL market too, with the UK Government proposal for rental properties to have a minimum EPC rating of C, for new tenancies by 2025 and all tenancies by 2028.

Although details of the proposed EPC rating changes are yet to be finalised, they are likely to create an impact, with BTL landlords having to consider how their existing property portfolio meets the requirements, including financing more efficient properties and whether certain lower-rated properties are sold or face hefty investment and financing to remain compliant with regulations. Neil Hoare

Commercial Director

With a career spanning almost 40 years in financial services, Neil has worked across many well-known lenders and providers, and maintains excellent contacts across the industry, as well as being a key presenter and face of the Network at HLP events across the country. Prior to joining HLP, Neil held senior positions at Personal Touch Financial Services, Select & Protect and Pink Home Loans.

£328 billion £276 billion

worth of fixed rate mortgages will have come to an end by December 2022 is the forecast value of product transfers in 2023, analysts predict

60% 5 year

of advisers lose their clients direct to their lender during remortgage fixed remortgage deals are becoming increasingly popular, say Foundation Home Loans