2024 forecast statement Richard Harrison, head of mortgages at Atom bank

12 December 2023

“Interest rate rises have had a big impact on activity throughout 2023, but with base rate having now likely peaked it would seem that mortgage rates have topped out too. Indeed we have already seen a host of lenders trimming their rates further in recent weeks, with the expectation that base rate will be cut at some point in 2024, which will further boost confidence among potential homebuyers.

“However, rates are only part of the story. The pressure points of recent years on household budgets will mean that far more would-be borrowers are likely to have the odd black mark on their credit history, falling into the ‘near prime’ rather than ‘prime’ category of borrowers. As a result, these borrowers may face more limited options if they are dealing with lenders who continue to rely on credit scores in their decision-making process. There is therefore a need for more lenders to consider a more holistic approach moving forward, assessing cases beyond purely a credit score.

“Given the financial uncertainty faced by many households, the ability to gain a speedy response to an application will also be particularly valuable in 2024. A quick turnaround removes stress for the borrower, ensuring they know where they stand and can plan accordingly, while efficient lenders provide important benefits to brokers too. That rapid answer allows the broker to focus their efforts elsewhere, such as on other clients or their own professional development. Brokers who work with nimble lenders may begin to expect the same level of speed and service across the board, increasing pressure on those lenders who take more time processing applications to up their game.”