Crystal Specialist Finance has revealed how intermediaries view the market in 2024 and what they are considering to be the driving forces for new business and the industry throughout next year.
The distributor conducted its Annual Survey with over 10,000 brokers for the second year running. It surveyed its broker database in November to gauge their thoughts on the industry and get a sense of how they are feeling about the market going into the New Year.
The tough market conditions were clearly felt as only 22% of brokers surveyed agreed that 2023 was a good year for their business – down from 48% in 2022. 77% told Crystal that business was the same or down on the previous year. Again, a significant increase from 53% in 2022. But, despite this, brokers are more optimistic for 2024 with 31% confident about the year ahead and fewer worried at 8%. (26% and 15% respectively last year.)
Their key concerns for the year ahead (at 74%) continue to be led by high interest rates and interest rate uncertainty. This figure is almost unchanged from last year when it was 76%. The cost of living crisis is less of a concern at 64% (76% last year) and high inflation does not figure at all in the top challenges to business growth in 2024. High inflation was cited by 48% of responders in 2022 and so brokers clearly feel that the recent falls in inflation bode well for next year.
Brokers also feel that further BOE base rate rises are behind us with only 17% believing it has further to go and 39% predicting a fall. While over a third expect base rate to fall, over half of brokers polled thought the same thing this time last year.
This year’s data also reveals that most brokers have diversified into new markets this year, in response to the cooling of the residential market. 35% moved into bridging, 28% buy-to-let and 26% commercial lending. This diversification looks set to continue, with 66% of brokers agreeing that they expect to diversify further in 2024.
Consequently, 73% plan to work more with a distributor like Crystal Specialist Finance in the forthcoming year (up from 52% last year), with many brokers citing the complexity of their cases, complexity of income streams and clients looking to use bridging finance for portfolio and auction purchases as the main drivers for doing so.
The use of technology is also of increasing importance to brokers, to enhance the speed of processing for their cases, with almost three quarters using digital case management to submit their deals.
With 2024 being a general election year, Crystal asked brokers which party they see forming the next government. Intermediaries are predicting a landslide victory for Labour at 73%.
Jo Breeden (pictured), managing director at Crystal Specialist Finance, said: “2023 should have been the return to some form of normality to the market. Instead, we have seen continuous Bank of England base rate rises to counter higher than forecast inflation and a consequent cooling of the property market.
“Our research has revealed that brokers remain uncertain about next year, have diversified into new markets to bolster their businesses and see the role of a distributor like Crystal as increasingly important.
“While the wider residential housing market has further to fall as we move into 2024, brokers are more confident about the outlook. The new year presents opportunities for the resilient broker that is prepared to venture into new markets – such as bridging, commercial finance and complex buy-to-let – where Crystal specialises. As ever, we will continue to provide our expert, award winning service as the industry faces into a challenging year ahead.”