Mortgage market drama should subside this year, thanks to stable property prices, strong rental demand, rising rents and softening mortgage interest rates, according to a leading broker.

After years of volatility, the Bank of England’s decision to keep the base rate at 5.25% marks a period of stability, according to LandlordZONE’s new mortgage broker partner, Mortgages for Business, which predicts that mortgage pricing and costs will come down in 2024.

MD Gavin Richardson (pictured) says there are plenty of opportunities for landlords who should find more products on the market as well as new lenders to support them.

Bouncing back

“SWAP rates - which impact how lenders price their mortgage products - came down over Christmas and although this didn’t translate into lower mortgage rates, as SWAP rates are now bouncing back to 3.7%, longer term we expect to see further base rate reductions both this year and next,” he tells LandlordZONE.

“The impact on mortgage rates will be challenging, and while they might not fall in line with the base rate, there should be a softening,” adds Richardson. It means landlord investors will have consistency so they can work out pricing and yields – plus, the cost of borrowing will come down as house prices plateau.

Increasingly tough

He believes the PRS is alive and well, and although some landlords who entered the market in the late ‘90s are coming up to retirement or quitting the sector - and it’s been increasingly tough for most landlords to get finance at the right rate in recent years - the company’s BTL business has grown, with 85% of it now through limited companies as investors realise incorporating makes financial sense.

“We’ve got a very loyal client base, and many are expanding their portfolios,” says Richardson. However, while landlords coming into the market aren’t as gung-ho, they are increasingly canny, he adds. “They need to be diligent about finding the right property at the right price. They’re also looking to diversify by either repurposing the high street, converting HMOs or going into holiday lets.”