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09 January 2017

The Shawbrook Property Finance Broker Barometer reveals predictions for the market this year
 
Following a period of uncertainty in the post-Referendum landscape, brokers across the board remain confident in business and market prospects, according to Shawbrook Bank’s Broker Barometer*. Conducted by the lender’s Property Finance division which incorporates both the Commercial Mortgages and Residential Mortgages teams, this is the first research exercise from a combined Commercial and Residential perspective. Over half (55%) of Commercial and half (50%) of Residential brokers are confident about their business growth for 2017. This shows an increase from July 2016** when 38% of Commercial brokers felt confident about business growth prospects, demonstrating a surge in optimism.
 
Whilst the economic climate post-Referendum is still seen as a significant obstacle, different challenges are now at the forefront of brokers’ minds. The focus for 2017 appears to be shifting as lending restrictions are now seen as the biggest challenge facing Commercial brokers’ businesses (28%), surpassing the challenge of the economic climate post-Referendum (24%). This concern is of similar importance for Residential brokers, as lending restrictions are viewed as the biggest challenge (19%), followed by the economic climate (17%).
 
This shift in sentiment is reflected by an increase in confidence in the UK economy post-Referendum which is evenly matched for Commercial and Residential brokers (47%). As more time has passed since the Referendum result was announced, sentiment appears to be shifting and uncertainties appear to be calming, with the economy remaining resilient.
 
Negative sentiment towards the EU Referendum result has receded since the summer. Over a third (35%) of Commercial brokers and in excess of a quarter (26%) of Residential brokers believe the result of the EU Referendum has had a negative impact on the lending environment, compared to 42% of Commercial brokers predicting negative outcomes in July 2016. Similarly, only 27% of Commercial and 25% of Residential brokers perceive the result as having a negative impact on clients.
 
Whilst both Commercial and Residential brokers agree that a fall in investor demand is the biggest consequence of the EU Referendum result on the UK property market (27% and 24% respectively), perspectives differ regarding further significant consequences. A fall in property prices was another top concern for Residential brokers (19%), whereas only 13% of Commercial brokers saw this as the biggest concern. Commercial brokers are also sceptical of the potential impact of the Government’s ban on letting agents’ fees, with 50% predicting that landlords will inevitably be forced to raise rents.

Karen Bennett, Managing Director, Commercial Mortgages comments:

“After the uncertainties faced in 2016, it is encouraging to see that brokers’ confidence is strong as we enter 2017. Over six months on from the Referendum result, it appears that nervousness and negativity around the consequences of the vote have reduced, and brokers are feeling optimistic about what the year ahead may hold. Prospects for business growth are particularly strong and, despite awareness of the challenges ahead, broker sentiment remains positive.”
“It is revealing that, within the Property Finance division, Commercial and Residential brokers have varying levels of confidence in the lending environment for 2017 (72% and 59% are confident in the lending environment respectively), reinforcing that Commercial and Residential brokers face different key influences.
 
Maeve Ward, Managing Director, Residential Mortgages continues:

“In terms of the key differences, one of the concerns raised by Residential Mortgage brokers is around lead generation, which I believe is the result of a lack of customer awareness of products such as second charge mortgages. I am pleased to learn from the results of the Barometer however that brokers strongly agree (85%) that both lenders and brokers should be responsible for driving forward awareness and education – which will only result in better lead generation and increased confidence in the market. As with our colleagues from Commercial Mortgages, I’m delighted that Residential Mortgage brokers see client demand growing in 2017 which gives me great assurance that brokers are putting customer awareness firmly on their radars in order to fuel this demand.”