Brokers Speak Out - key industry issues for 2024

Crystal Specialist Finance has conducted its Annual Survey with over 10,000 brokers for the second year running.

The point is to see how intermediaries view the market in 2024, and what they consider the driving forces for new business>

The tough market conditions were clearly felt as only 22 per cent of brokers surveyed agreed that 2023 was a good year for their business – down from 48 per cent in 2022.  Some 77 per cent told Crystal that business was the same or down on the previous year - again, a significant increase from 53 per cent in 2022.

But despite this brokers are more optimistic for 2024 with 31 per cent confident about the year ahead and only eight per cent declaring themselves worried.

Key concerns for the year ahead continue to be led by high interest rates and interest rate uncertainty. The cost of living crisis is less of a concern and high inflation does not figure at all in the top challenges to business growth in 2024.

Brokers also feel that further Bank of England base rate rises are behind us with only 17 per cent believing it has further to go and 39 per cent predicting an imminent fall. 

This year’s data also reveals that most brokers have diversified into new markets in response to the cooling of the residential market. 

Some 35 per cent moved into bridging, 28 per cent into buy to let and 26 per cent into commercial lending. This diversification looks set to continue, with two thirds of brokers agreeing that they expect to diversify further in 2024. 

Consequently, the large majority plan to work more with a distributor in the forthcoming year, with many brokers citing the complexity of their cases, complexity of income streams and clients looking to use bridging finance for portfolio and auction purchases as the main drivers for doing so.

This number highlights the growing appreciation of the need for specialist distribution amongst intermediaries as it has increased significantly from 52 per cent last year, claims Crystal.

The use of technology is also of increasing importance to brokers, to enhance the speed of processing for their cases, with almost three quarters using digital case management to submit their deals.

And with 2024 being a general election year, we asked brokers which party they see forming the next government. Intermediaries are predicting a landslide victory for Labour at 73 per cent.

Jo Breeden, managing director at Crystal Specialist Finance, comments: “2023 should have been the return to some form of normality to the market. Instead, we have seen continuous Bank of England base rate rises to counter higher than forecast inflation and a consequent cooling of the property market. Our research has revealed that brokers remain uncertain about next year, have diversified into new markets to bolster their businesses and see the role of a distributor like Crystal as increasingly important.

“While the wider residential housing market has further to fall as we move into 2024, brokers are more confident about the outlook. The new year presents opportunities for the resilient broker that is prepared to venture into new markets – such as bridging, commercial finance and complex buy to let.”