January is always a month with an underlying feeling of trepidation in the mortgage industry. Will the new year start slowly, or will it be full of activity? What we've seen at Fowler Smith Mortgages & Protection is the latter.
We've had plenty of inbound enquiries this month already – for those wanting to buy their first home, move home or invest in property. Interestingly, a number of the investors clients have been from overseas, too. It's always a welcome sight to hear that clients based elsewhere in the globe want to focus on the United Kingdom for their property investments, and it gives a positive indication of where our market is heading.
What is also helping things, I'm sure, is that there are positive noises from market economists regarding the Bank of England's base rate, and how it's expected to drop multiple times this year. Although it doesn't have a direct correlation to the swap rates, positivity is always welcomed and boosts market confidence – which, in turn, can have a positive effect on swap rates, ultimately feeding in to fixed rate pricing with lenders.
As a firm, we've already had a number of lenders in our offices, discussing the year ahead. Many talk about increasing market share, and also about increasing lending amounts. This ambition and positivity evidences an increased appetite – so I'm hopeful that we'll see some changes to lenders' policies, hopefully opening the doors for more and more successful mortgage applications.
On the investment buy to let side of things, interestingly we've seen something a little different this year already. We've actually seen that some buy to let investors are looking to acquire property in bulk. Not just the one investment, but some buying two, three, or even a significant amount more. I do wonder if this is due to the stamp duty changes that may have given professional landlords more confidence to be able to acquire a greater number of properties as they feel the market is less saturated at present, as some first time landlords are, maybe, holding fire. On the whole, it seems like opportunity has been created for seasoned investors, and they're not usually ones to miss out!
Today (29th January 2025), the latest reports on five year SONIA swaps are sat at 3.95% - down from 4.051% on the 27th December 2024. Slight decreases are welcomed and, coupled with lenders rallying for market share and pricing their products strategically to win business, indicates to me that activity will continue throughout the year.
Recently, we saw some statistics that more and more millionaires are leaving the United Kingdom. With lenders frequently improving their propositions, something that I'd hope that we'll see more of this year is even more options in the mortgage market for expatriates and overseas nationals to purchase here in the United Kingdom. This is, quite apparently, a growing market, and should be catered for.
It leads me to, perhaps, a cliché – that it is now more prevalent than ever to choose the right mortgage broker when clients are looking to apply for a mortgage. Brokers have a lot to keep up with in the industry, and choosing a brokerage that is well-versed in the more complex space is important. Clients very rarely have straight forward circumstances, and it's vital that the delivery is there for them.
On the whole – January has been an exciting month. Plenty of applications, enquiries and positive industry noises. Yes, there have been wider changes – economically and politically – but you wouldn't have thought it. The expat clientele, in my opinion, are the ones to watch. If I were to give my predictions, they're where I think we'll see a lot of the activity in the property market coming from this year.
Jonathan Fowler
Founder & Managing Director
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