Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Mortgage Market Faces Confidence Gap Despite Lender Activity

Lenders are continuing to compete for business in the UK mortgage market, but uncertainty and negative headlines are affecting consumer confidence. John Phillips, CEO of Just Mortgages and Spicerhaart, highlighted that while economic volatility and speculation around interest rates persist, lenders are still active and adjusting their criteria.

Phillips noted that inflation and speculation about future interest rate movements are contributing to hesitation among consumers. Despite this, he observed that lenders are remaining in the market, tweaking their criteria, and competing for business. He stated that lenders need to lend in order to grow their mortgage books and meet end-of-year targets.

As the year progresses, Phillips expects lenders to focus on pricing strategies, especially in September, to position themselves for the months ahead. He pointed out that with transactions taking longer to complete, mortgages agreed in September are likely to finish by Christmas, helping lenders achieve their annual targets.

Phillips also addressed the impact of negative market narratives on consumer behaviour. He suggested that ongoing discussions about inflation, interest rates, and economic uncertainty may lead some potential buyers to believe that the mortgage market is not accessible to them, even if that is not the case. He emphasised the importance of brokers in providing accurate information and helping customers understand the options available, including zero-deposit products and shared ownership schemes.

For letting agents and inventory clerks, the ongoing activity among lenders and the need for accurate market information may influence rental demand and property transactions as consumer confidence shifts.