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2021 was certainly a year to remember for anyone working in the mortgage industry


Publication date:

14 December 2021

Last updated:

15 December 2021


Marie Grundy

As we look back on 2021 what does 2022 have in store for the mortgage industry and what are the opportunities for brokers as the emphasis switches from house purchase to remortgage activity?

 Housing market outlook

UK finance are predicting gross mortgage lending could peak at £316m in 2021 which would represent the highest level of mortgage completions since the financial crisis.

Q2 2021 saw gross lending of £89bn which was the highest level since Q3 2007 propelled by the stamp duty holiday deadline on 30 June where the removal of the tax burden of the first £500,000 of the purchase price came to an end.

This is in direct contrast to a slump in house purchase activity by 52% in October following the phasing out of the stamp duty holiday which came into effect on 30 September.

Restrictions in housing supply has dominated Q4 of this year with Rightmove reporting that the available housing stock is at a record low averaging just 14 properties per estate agent branch.  Conversely there are positive signs that the housing market will return to more normal levels of activity in 2022  with house price inflation expected to level off against a backdrop of rising interest rates and the prospect of a fourth wave of the pandemic.

Remortgage and product transfer boom set for 2022

Whilst mortgage transactions relating to purchase activity were at peak levels particularly in Q2 and Q3 of 2021 the share of gross mortgage advances from owner occupied remortgage activity represented just 16.6%.  However with 2022 set to be one of the biggest years for remortgage maturities for many years with just under £40bn maturing in January alone there are plenty of opportunities for advisers to revisit their clients mortgage requirements.

Customer retention strategies should be a key focus for brokers in 2022 and this will mean adopting strategies to adapt to the exponential growth of the product transfer market.  For a significant number of borrowers a product transfer could be crucial to preserve access to lower cost borrowing  options particularly if their circumstances have changed post pandemic. 

If you also take into account that most product transfers are done on a like for like borrowing basis with a significant number completed by execution only it is important that intermediaries consider a wider range of product solutions not limited to traditional remortgage options to meet borrowing needs particularly if they are looking to raise capital.

Strong demand for Second Charges set to continue into 2022

As a second charge specialist it would be remiss of me not to mention what a hugely positive year 2021 has been for this sector which has shown real bouncebackability following the effects of the pandemic on second charge lending in 2020.  

The latest figures from the Finance and Leasing Association last week confirmed lending was up 43% in October and it looks like 2022 has the potential to be the best year for second charge lending since the financial crisis. 

There are a number of growth drivers for second charge lending heading into next year.  Linking back to my earlier comments on the expected demand for product transfers, having the opportunity to address further borrowing needs will be complimented by the inclusion of second charges within the advice process and will also provide valuable options to those borrowers whose change in circumstances might not make them eligible for a high street remortgage.

Seconds can also provide flexibility in loan sizes for higher end home improvement projects and second property purchases such as holiday homes or buy to let acquisitions and that is a trend we have been seeing at West One over the last 12 months.

Whichever way you look at it 2022 is a year of opportunity for intermediaries everywhere to continue to provide a vital service to mortgage customers and the Society of Mortgage Professionals will be fully focused on identifying more meaningful ways to work closely with our membership as we head into the New Year. 

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.


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