Crystal Specialist Finance has surveyed over 10,000 brokers for the second year running and it 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 this year.
The specialist distributor surveyed its broker database in December to gauge their thoughts on the industry and get a sense of how they are feeling about the market at the start of 2024.
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.
That said, 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 this year (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 now 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.)
The data also revealed that most brokers diversified into new markets last 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 in 2024, with 66% of brokers agreeing that they expect to diversify further this year.
Consequently, 73% plan to work more with a distributor like Crystal Specialist Finance this 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.
This number highlights the growing appreciation of the need for specialist distribution amongst intermediaries as it has increased significantly from 52% last year.
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 this year almost certainly being a general election year, we 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 saw 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 this 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 start 2024, brokers are more confident about the outlook. 2024 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 yet another challenging year.”