Hello, my real estate market friends.
Once again this industry has been doing its best idea of a theme park ride designed by someone with a bad sense of humor.
The good news is that, for the last few weeks at least, the drops have felt a little shallow and there have been a few loop-the-loops that have us all feeling confused.
As traders, we lived through the feast of March and the famine that followed. But recently there have been a few green shoots investigating economic waste. So, as always, I tip my slightly battered hat to all of you out there, helping clients make sense of the market that sometimes makes absolutely no sense.
It seems that we are now firmly in the consumer market
If you think the mortgage market is crazy, it’s an old unknown for Sir Keir Starmer and his government. On the other hand, the UK economy recorded unexpected growth, reportedly the strongest in the G7, while inflation eased to 2.8%, helped by lower labor costs and a slight rise in food prices. There were also better looking figures for immigrants and NHS waiting lists.
Normally, you would expect the government to shout that from the rooftops. Instead, everything seems to have been lost in the political ether that has engulfed this government. Because, on the other hand, the broader economic picture still has the clear momentum of the 1970s so, with optional flares, the rise of stagflation is not so much.
We have yet to feel the full force of the Middle East conflict, with inflation expected to rise again, possibly to 4%, while the OECD has warned that UK growth could fall below 1% this year, with unemployment still at 5.5%. In other words, stagflation is still lurking in the shadows, and no one wants that stagflation back in the bedroom.
I am delighted to see one of the biggest lenders trying to help more first time buyers overcome the deposit hurdle
It seems that too many have lost faith in Starmer’s leadership, and all eyes are on the northern town of Makerfield. The question is: will Andy Burnham bounce back? And, if so, are you a Leftist?
Who knows? But I’m sure the country doesn’t need more flexibility, yet more navel-gazing and another kind of ‘Who’s got the keys to Number 10?’ without a well thought out plan. We’ve seen that movie before and the reviews were bad.
I’ve always said that communication is the root of about 95% of problems in any organization, and politics is no different. If people don’t understand the plan, they rarely trust the trip.
For homeowners, the journey over the past five years has been brutal. The ONS reported that home owners with a mortgage experienced the highest rates of cumulative inflation, at 37.6%. That’s some math, and it sees the weekly shop, energy bill, remortgage shock and quiet kitchen table conversations all rolled into one.
Recently there have been a few green shoots investigating economic waste
However, we have heard calmer words from Bank of England governor Andrew Bailey, who indicated that he would be willing to let inflation rise and not raise interest rates to support a weak economy. However, “that tolerance could weaken if signs of second-round effects start to appear”.
What we really need now is for peace to break out on all sides. Peace in the markets, peace in politics and, ideally, for the orange to come up with something like a peace plan for Iran.
Also, if only he would stop trying to attack everyone, that would be great. Cuba has been mentioned as the next target, which would undoubtedly send the cost of tobacco, and that may be the last straw for some.
The housing market, meanwhile, has seen some forecasters revise their forecasts down significantly for this year, with Savills moving from a 2% house price rise to a 2% fall. However, it is still projected to grow by around 18.5% by 2030, indicating that this year could be the best year to buy.
Although a dip was always on the cards when events in the Middle East began to feed into the wider economy, this still feels like a market moving in the headlines rather than a grip on the bottom. The figures show a sense of caution has been applied to homebuyers over the past few months, and it appears that we are now firmly in the buyer’s market.
The expansion of online travel for execution alone is not the answer, nor does it bring growth. We do that
However, the underlying fundamentals are stronger than the sentiment suggests, as household funds are strong, affordability is slowly but steadily improving, and exchange rates are driving the cost of mortgages remaining below their 2023 peaks. If the image of the world is to last, this softening must be temporary.
What about the latest financial markets? Well, three-month-old Sonia has slightly increased from 0.01% to 3.75%, and the volatility has decreased during the World Cup.
The 2-year yield was down 0.17% at 4.07%
The 3-year yield was down 0.15% at 4.06%
The 5-year yield was down 0.11% at 4.11%
The 10-year yield was down 0.10% at 4.36%
I was very pleased to see one of the biggest lenders trying to help more first time buyers overcome the deposit hurdle.
Well done to Halifax with its £5K deposit aimed at those less fortunate than extra help. When one of the UK’s biggest lenders puts its weight behind this part of the market, it sends a message of confidence in the housing market.
NatWest will now lend 6.5 times income to those with a combined income of more than £150,000, up to 75% gross LTV. Related to its partnership with Rightmove is to provide digital mortgage solutions and offers.
We have yet to feel the full force of the ongoing Middle East conflict
This raises many questions about the appropriateness and lack of advice. Borrowers may be disappointed if they are not accepted when there are possible solutions for them elsewhere, or they may end up taking something that is not really right for them. What about security, vulnerability and a host of other features?
If I were Rightmove, the best decision would be to offer choice and advice through the seller, but then I wouldn’t say that, would I?
The lovely new version of Rely from OSB has helpfully added the availability of full application cloning and Companies House information to its system.
Keystone Property Finance has launched into commercial lending of up to £2m, while Allica Bank has developed its commercial investment proposition. It will now lend to selected maintenance properties on an investment basis and will consider first-time home owners for specific investment loans.
Meanwhile, Hodge Bank has increased its LTVs, with refinancing up to 95% LTV and debt consolidation up to 90% LTV.
This still feels like a market that is moving in the headlines rather than holding on to their bottoms
I was really interested to see the Paradigm Mortgage Services paper calling for regulated mortgage advice to be mandatory for all first time buyers. It said that first-time buyers often show many indicators of vulnerability, such as limited experience with long-term financial products, low financial stability, high emotional investment in the home buying process and lack of knowledge.
If you add a growing protection gap and potential economic abuses, the expansion of internet travel only is not the answer, and it certainly does not bring growth. We do that.
It is time for us as brokers to come out and fight proudly and publicly for what we do in the best interest of our clients. We are the engine of growth, the protector and the conscience. So be proud, respect yourself and shout about it.
Andrew Montlake is a director at Coreco
The hero goes to Zero
Large lenders such as Halifax and Santander to join the founding party
I NextGen 30 Under 30 Program – good idea
Look closely at the security gap – we need to solve this as an industry
Instant digital mortgage offers without advice – requires more thinking
This is the hope another leadership contest – get on with it and take control
Do You Know What Really Grinds My Gears?
As a seller, there is nothing worse than lenders who sometimes accept yes, yes, no way. Although it seems to make things more difficult when there is a problem and sometimes you forget that there is a client at the end of this.
Going back to the client to explain a decision we don’t really understand is terrible. I would just have a quick no.
That’s the point about communication. In our industry, things often live or die by effective communication.
Good communication involves honesty, empathy and collaboration, and results in trust, growth and ultimately success.
We should always put ourselves in the shoes of those we are trying to communicate with, give ourselves that extra time to think about how things are received, and speak to others the way we would want to be spoken to.
This article appeared in the June 2026 issue of Mortgage Strategy.
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