Most forecasts suggest a continuation of a steady mortgage market in 2026, shaped by lower rates and importantly a strong demand for advice.
But is this very need for advice under pressure - particularly in the product transfer (PT) and remortgage space?
For advisers, a combination of those two things at once means: a) a reliable stream of work, but b) a more competitive environment in which control of the client relationship will matter more than ever.
Let’s look at the forecasts first. Gross lending is expected to sit somewhere close to this year and last, with Lloyds Banking Group putting the figure around £285bn. It is not explosive growth, but it is stable and workable.
The PT market could however be the main story. My analysis of CACI and Barclays data seems to suggest a combined residential and buy-to-let total of roughly £427bn for 2026, and unsurprisingly retention is an area where lenders are increasingly concentrating their efforts.
We all know how valuable existing customers are, but are there battle lines being drawn in this area with some institutions working hard to keep them, without necessarily involving the original adviser, or indeed mentioning advice.
This overall picture is supported by wider forecasts. The EY ITEM Club expects lending growth of just over 3% next year and a little under that in 2027. The Office for Budget Responsibility sees modest house price growth for the rest of the decade and expects transaction volumes to climb from the current level to around 1.3 million by 2029. It also expects the housing stock to rise by just over 300,000 new homes a year by the end of the decade.
Sentiment was undoubtedly mixed in the second half of 2025. One reason was the noise around potential tax changes. Speculation about stamp duty and new annual property taxes led many buyers and sellers to pause.
Zoopla’s figures underline this: buyer demand was down 12% in the four weeks to 23rd November, and sales agreed were down 4% compared with the previous year. Prices in parts of the South slipped slightly, while more affordable regions stayed firm.
Now the Budget has come and gone without major housing shocks, confidence is expected to return. The signs suggest a busier start to 2026 as those who waited for clarity begin to move again.
In that context, indeed any context, consumers want and need advice. This should not be underestimated. Many borrowers coming off five-year fixes will face higher payments and will need help working out the best route through their options. Those coming off shorter deals may find payments fall, which opens the door to fresh planning around protection, overpayments, or other priorities.
At the same time, as mentioned above, advisers face growing challenges. The removal of the advice interaction trigger for existing borrowers is a worrying sign.
Add to this, the content of the FCA’s Discussion Paper on the future of the market, which shows comfort with more direct journeys and more use of AI. Theory is being matched in practice with emails, letters and texts to existing borrowers going out earlier and more often.
Banking app messages appear on clients’ phones before advisers have even opened their review. Dual pricing is becoming more common. Some lenders are now offering sharper deals through certain direct or limited routes that advisers cannot match.
None of this is accidental. It reflects a growing effort to keep more margin, and why wouldn’t such institutions not do this, after all they answer to shareholders who rightly want to maximise their returns. But given 90% of new business comes through the advisory channel I don’t think it is unreasonable for advisers to ask for a level playing field when looking to retain customers?
It is also true that lenders only have two real levers: price and risk. Its brilliant so many lenders have improved their affordability and criteria models and are looking to be responsive and flexible for today’s customer against a backdrop of increasing complexity in their needs.
It’s actually one of the success stories of 2025. Yet if risk sentiment turns, due to rising unemployment or weak economic data, they can pull back just as quickly.
Several risk officers have told me that rising job losses in the 35-55 age group would be enough for them to tighten criteria and raise pricing. That does not mean the market is fragile, but it means advisers need to stay alert.
So where does this leave brokers as we head into 2026? In a better place than the headline noise suggests? There is a large amount of business to write. Clients want advice and trust advisers to give it.
There is also a strong case for advisers to grow in the areas that sit beyond the reach of app-led/directly-focused retention. Specialist and complex cases are a clear example. These include debt consolidation, mixed income, later life, credit issues, foreign nationals, expat lending and more.
These clients value the work advisers carry out, are inherently loyal, and give advisers greater scope to earn more per case. Many of these also fall outside mainstream retention models, which protects advisers from losing clients to direct approaches.
It’s also where businesses like Paradigm can make a significant difference to our member firms. For example, we can provide access to dozens of specialist societies through tools like our Building Society Mailbox. We can help advisers understand the income impact of changing proc fees. We can use our scale to tell lenders when a decision will hurt advisers or distort the market. And we can offer training, guidance and regular updates across protection, fraud, AI, risk and business planning to help firms adapt early rather than late.
Advisers have shown time and again they can thrive in steady markets, busy markets, and difficult markets. The next year will be no different, a question to consider is not whether the business is there but who controls it?
There is plenty of business to write. Clients need help. Lenders want the volume even if they will go strong at retention. If advisers stay close to their clients and make use of the support available to them, they can hold the ground that matters most: the relationship with the customer.
