In the first in a series of interviews with industry professionals,  I ask Carly-Marie Cheeseman from Clifton Private Finance, a specialist mortgage broker sourcing the most cost-effective and appropriate finance solutions, about the mortgage market in 2023. Clifton Private Finance is credited for it’s expertise and experience in high-end property finance to facilitate high net worth and international clients borrow the amounts they need to move.

 

How have you found the first quarter? Since the New Year, do you think buyers are feeling more confident in borrowing now rates have stabilised a bit or more anxious of the market as a whole? And any predictions for the next quarter? 

It’s been busy, especially right at the turn of the year. At the beginning of 2023, there was a lot of people asking for facts and figures to get an idea of the market and work out what they can and can’t do.  

Which can be fairly normal for the beginning of the first quarter, but this year I felt a significant increase. Potentially due to the volatility of the market towards the end of last year. 

I would say things have settled throughout the quarter. We’ve been getting consistent enquiries since the beginning of the year, but now we’re getting more serious queries.  

We’re obviously very intrigued about what’s going to happen with the market, especially regarding the aftermath of last year’s mini budget.  

I feel confident, and I think buyers and clients are positive too, because rates have stabilised.  

 

Where are the most popular areas to buy at the moment? 

I’ve seen a distinct split in queries between the Cotswolds and Central London, which is an interesting change. There’s been a lot of interest in these areas from British and overseas investors alike on my end. 

In the past it’s been popular to invest in more Northern cities like Manchester, especially so for buy to lets.  

But since COVID, investors are now more interested in holiday lets and commercial property. For cities like Manchester, it’s likely because the rental market has become oversaturated, and it’s not as great a yield as it was. 

Holiday lets have also been huge since COVID, so there’s been an increase there too.
 

Are you seeing more first-time buyers returning to the market now that rates have stabilised and if so, what size of deposit do they generally have? I assume the ones that are returning have a chunkier deposit and prefer this option to renting? 

When it comes to first-time buyers based in the UK, they always tend to have around 5 – 10% deposits. For first-time buyers who are investing from overseas, it’s a little bit more complex, because overseas buyers will need a 20% deposit minimum to be eligible for a UK mortgage. 

Personally, as a broker, I haven’t seen that many first-time buyers. But that may be due to my niche as a broker, as I mainly deal with international mortgages.  

Traditionally, first-time buyers will have a smaller deposit and be looking to borrow up to the maximum they can get. Affordability is certainly on first-time buyers’ minds, and a common goal tends to be finding a lender that can accommodate a high income multiple.
 

Many are saying interest rates will come down by the end of the year – what do you think they will do and where will they settle on average? 

We were expecting another increase at Easter, but it hasn’t arrived yet. Inflation is still high right now, which to me indicates that rates will go up again slightly.  

The rates are expected to stay quite static for the next 12 months and then we’re expecting a slow and gentle drop.  

Even with the base rate going up to 4.25%, we’ve seen lenders offering rates below 4%. Which makes us think that they’re expecting the base rate to back down within the next two years.
 

Have you had any landlords refinancing and what is the consensus? Have some faced with increase decided to sell or swallowed it? 

We have had a lot of enquiries on the subject. Recently we have had some large portfolio landlords exploring their options before they refinance, but we’ve come to the conclusion that they’re better off staying where they are before their rates are due. 

Regarding selling up, most clients seem to be swallowing their losses and waiting to see how things play out. 

Over the next 12 months, I do expect the attitude to change. There’s been significant adjustments to the way landlords are taxed, and as well as this, the upcoming changes to EPC legislation for rental property could see an increase in landlords considering selling. 

What is the question you are asked the most by clients? 

It’s heavily rate –focused. Clients want to know what’s happening with the market, what rates to expect and advice on whether they should get a 2-year or a 5-year deal.  

There’s increased stamp duty if you live overseas, so questions on that pop up a lot, along with queries about rates. 

First-time buyers are usually looking for flexibility. I’ve had a few clients looking to buy their first property who ask if they can rent out their home should they decide to work abroad, and what options are available to them if they choose to do so. 

We also get a lot of enquiries regarding more unique property types, where clients need a specialist broker’s advice to get a proper idea of their options. 

 

What do you find is the biggest misconception among clients regarding the property market? 

It can be harder to gain a client’s trust than it used to be. There’s a lot of negative news coverage that can sometimes be misleading or lead to perceptions of the market that aren’t necessarily accurate.   

People tend to underestimate their options, and there are small pockets of clients who are always going to be apprehensive about buying because of what the media is telling them.
 

What is your top tip for anyone looking to buy this year? 

Always get professional advice. People have more options than they realise, and having a professional to guide you can really widen the net.  

Even though help to buy is over, there are still lots of schemes available. Many first-time buyers think they need to save up for a huge deposit, but if you’re still renting, why not start exploring your options?  

This is especially relevant to the London market, as we have seen some price drops this year.  

 

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