ReadRead Just Mortgages reflect on 2021 and look at their hopes for the year ahead in the state of the nation.

Introduction by John Phillips

I want to start by saying how immensely proud I am of everyone at Just Mortgages, for adapting in what has been the most unusual year I have ever known.

I think that it’s fair to say that 2021 has not been the year that many people expected.  The amount of lending this year has been nothing short of bizarre. There was almost no one who, this time last year, would have forecast that the mortgage industry would have written, what is expected to be £316 billion of mortgage business by the end of 2021. That will be a 29% rise on the £244 billion in 2020, also outstripping 2019’s £268 billion.

This boom in mortgage lending has been driven by the three stamp duty cliff edges and partly by the fact that it wasn’t possible for many people to go on holiday or to spend the money that they would normally do. This has led to many people spending it on housing – either investing in a new home or extending or renovating their existing property.

At Just Mortgages our lending has outstripped the market and increased by one third in the past year. I think this proves that the Just Mortgage strategy is working.  We have focused on a more holistic approach to financial advice.  We expanded beyond only mortgages and protection this year by also establishing our wealth advisory service, Just Wealth. We are also increasing our focus on equity release.

It remains an uncertain market however.  With the surges in energy prices, the Omicron variant and rises in the Bank of England base rate I expect the house purchase market to ease back a little in the first quarter of 2022. Purchases will also be hampered by the lack of housing supply. This year we have seen many people who have lost up to four or five houses to higher bids from other people.

For mortgage brokers, instead of purchase business however, this will be replaced by remortgages. The remortgage market is already booming and this will continue – especially as a large tranche of five-year fixed rates reach maturity over the next few months.  Come Easter, when the economic situation may well have settled down, and I expect the number of house purchases to start increasing again.

The big question is what will happen with house prices?

The lack of supply is continuing to drive house price escalation, but as interest rates and fuel prices rise, there may well become a point where people are just not prepared to pay the prices they need to, especially at the lower end of the market.

This is likely to be good news for landlords, who, while having to absorb higher house purchase costs, are able to charge higher and higher rents from people who just cannot afford to get onto the housing ladder.

With such a changing and uncertain market. The key for brokers will be to take a more rounded approach, servicing existing clients as well as new ones and looking beyond mortgages and protection to all of a client’s financial needs.

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