2014 forecast: blue skies ahead

[Blog from: Karen Bennett, sales and marketing director, Commercial Mortgages, Shawbrook Bank]

Shawbrook Bank
13th January 2014
Blogs

As 2014 gets into its stride, we wanted to take a moment to reflect on how much changed in 2013, and to consider the outlook for the year ahead.

Since the beginning of 2013 there has been a sea change in the mortgage market and the upturn we’ve been promised for so long seems finally to be arriving. Since the crash in 2007/2008, the market has tried to be positive every year – but there has always been an element of caution, and it’s not quite rung true up to this point. However, as 2013 drew to a close, that optimism was finally seeming more realistic and, most importantly, more sustainable. Everyone we’ve spoken to was busier this Christmas than last year, and a significant number of businesses are looking to expand in 2014. We’ve certainly seen the renewed energy here at Shawbrook – in the last year alone the Commercial Mortgages division grew by 200%.

In 2013 we also showed our commitment to the short term loan market by introducing product innovations and creating a dedicated team for progressing STL deals. We saw a significant increase in demand for short term finance for refurbishment in particular, with many investor clients looking to add to the value of their property before letting it out or selling it on. Refurbishment loans and STLs generally will continue to be an area of focus for us going into 2014 – so do watch this space. 

We’re very proud of this growth and activity but none of it would have been possible without our broker partners. Our business model means that all Commercial Mortgages deals go through our managed panel of intermediaries so their support is crucial. Accordingly, they are our eyes and ears in the market and any product or process change that we implement is run by them for feedback, and is often actually the result of suggestions made by them.  

This year is set to be a good one for brokers; recently the Legal & General Mortgage Club Forum forecast that intermediaries would be responsible for at least 60% of mortgage transactions in 2014. However, in the midst of this positivity we need to be aware that in addition to growing the market we must all work towards creating a sustainable industry. It’s important that everyone keeps in mind the fact that although rates are currently extremely low, they can therefore only go one way from here: up. It’s the duty of lenders and brokers alike to make sure that property investor clients’ portfolios are sensibly geared, and that payments can be realistically met.

Of course this year we’ll see the implementation of the Mortgage Market Review, which the industry will need to be ready for by April, as well as changes to FLS which will encourage more lending to small businesses. We’re excited about the developing trends in the market and are looking forward to bringing out the host of products and process innovations that we have up our sleeves.

We hope you had a restful Christmas and, like us, are looking forward to the further excitement 2014 will bring.

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