"2022 should have been the return to some form of normality to the market, but instead we have seen volatility and instability that is set to continue long into 2023."
New research from Crystal Specialist Finance has revealed how mortgage brokers view the market in 2023 and what they considered to be the driving forces for new business and the industry throughout next year.
Crystal surveyed their broker database in December to gauge their thoughts on the industry and get a sense of how they are feeling about the market going into the New Year.
48% of brokers surveyed agreed that 2022, despite its challenges towards the back end of the year, was a good year for business and indeed better than 2021.
But, despite this, there is considerable uncertainty when it comes to 2023 within the industry with 74% of responders stating that they are either unsure about the year ahead or worried about the prospects for their business. 75% of those surveyed said continued interest rate uncertainty and the ongoing cost-of-living crisis will impact their business and the wider industry over the next year. Despite recent challenges and wider broker frustration with lender processing times – only 22% saw this as a challenge to their business.
The data also reveals that most brokers have diversified into new markets this year in response to market challenges, with 37% moving into buy-to-let, 29% into bridging finance and 17% into commercial finance. This diversification looks set to continue, with 70% of brokers agreeing that they expect to diversify further in 2023.
As a consequence, 52% expect to work more with a master broker in the forthcoming year, with many brokers citing the complexity of their cases and an increase in clients with adverse credit histories as the main drivers for doing so.
There is also some optimism with regard to the direction of the base rate, with over half of respondents (54%) stating that they think that it won’t go above 5%. But, in comparison, a third of brokers surveyed still expect it to peak above that.
Jo Breeden, managing director at Crystal Specialist Finance, commented: “2022 should have been the return to some form of normality to the market, but instead we have seen volatility and instability that is set to continue long into 2023. Our survey has revealed that brokers are uncertain about next year, have diversified into new markets to bolster their businesses and see the role of a master broker like Crystal as increasingly important. This trend has been evident in our business performance in Q3, with our enquiry numbers up 20% year-on-year and has continued into Q4 with current enquiry volumes up 30%.
"While the wider residential housing market will decline further in 2023, this presents opportunities for the resilient broker that is prepared to look into new markets – such as bridging, commercial finance and complex buy-to-let – where Crystal specialises. As ever, we will continue to provide our expert support as the industry faces into a challenging year ahead.”
