By Stephen Johnson, managing director of Commercial Mortgages at Shawbrook Bank
With the end of the year approaching, I felt it would be a good opportunity to reflect on how things have gone in 2013 and what our brokers have been saying.
All our commercial mortgages business is conducted through a broad panel of brokers making them a fundamental part of our business. We therefore place a lot of value on their feedback and market insight.
At a macroeconomic level all the signs are positive. The Office of Budget Responsibility has just revised this year’s UK growth forecast from 0.6% to 1.4% and next year’s from 1.8% up to 2.4%.
Hopefully this trend will only go one way. Equally, recent figures from the CML herald good things to come for the mortgage market.
On 9 December, the CML predicted that gross lending would rise to £195 billion in 2014, up 15% from an estimated £170 billion this year.
This will be welcome news to our brokers who have been feeling cautiously optimistic for some time.
Earlier this quarter we ran the first in a series of surveys testing the temperature of our brokers to see how they felt about the market’s prospects. Brokers are at the frontline of the industry after all and have the keenest sense of which way the wind will blow.
They were upbeat about the economy, backed up by the positive feedback they’ve had from clients.
One broker said: "We're noticing an upturn and a return of the feel-good factor."
Another said: "The majority of property investor clients are confident."
Yet there was an underlying note of caution, with another broker saying that "the housing market improvements are a welcome sign, but everything else still feels very fragile".
As rents continue to rise around the country, the buy-to-let market is one area that seems to be robust.
This makes sense in view of the shortage of social housing and the steady decrease in owner-occupiers.
If lenders are responsible about how they support property investors, buy-to-let will continue to play a significant role in ensuring there is enough housing in the future.
In fact, it was one of the areas that most of our brokers said they operate in.
They felt that the specialist buy-to-let market in particular was on the up.
Here's a typical comment: "The specialist buy-to-let market is growing significantly, mainly due to the traditional buy-to-let lenders becoming more restrictive to professional experienced landlords."
It’s been a long hard slog over the last few years, but things are getting better, and next year the market is looking yet more optimistic.
We’re certainly looking forward to 2014. We’re committed to continuing to deliver on our side of the partnership with exceptional service and innovative product evolution.
We also have a few tricks up our sleeves for our brokers to make next year that bit more interesting.
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