Despite a somewhat turbulent year for the market, there is cautious optimism within the industry as we look ahead to 2025.
The Intermediate Mortgage Loan Association (IMLA) predicts healthy lending growth, expanded brokerage business, and increased refinances in 2025. 
In its latest report, the association predicts that the proportion of mortgage business conducted through intermediaries will continue its upward trajectory, rising from 87% in 2024 to 89% in 2025 and 91% in 2026. There is.
Other key forecasts include total mortgage lending increasing from £237.5bn in 2024 to £275bn in 2025 and a further increase to £295bn in 2026, with home purchase lending increasing by £1,770bn each. This includes £88bn and £190bn of remortgages, followed by £94bn. .
Loan growth will be supported by lower interest rates and increased refinance demand as affordability pressures ease.
From an affordability perspective, the average new borrower currently spends about 15.5% of their income on mortgage interest.
IMLA suggests this figure will decline slightly as interest rates fall, improving affordability slightly and opening further mortgage opportunities for the 1.8 million borrowers whose fixed rate contracts end in 2025. I am doing it.
It also expects 70% of gross home loan growth to come from home purchase advances (£177bn), while remortgaging is expected to recover by 13% to £88bn.
The association also predicts that buy-to-let (BTL) lending will increase by 14% to £38bn in 2026, reaching £42bn (up 11%).
Meanwhile, delinquencies of more than 2.5% of loan balances began to decline in the third quarter of 2024, contrary to predictions made at this time last year.
We expect this downward trend to continue from 0.98% of accounts at the end of 2024 to 0.94% by the end of 2025, and further decline to 0.85% in 2026.
IMLA Executive Director Kate Davies said: “After a period of economic instability, high inflation, rising borrowing costs and great uncertainty, the environment feels much calmer and the housing market and mortgage lending “The market is coping surprisingly well with the 'new normal'.” This is the lowest interest rate of the past 10 years. ”
“2025 looks set to be a year of more stable, modest but welcome growth. , we certainly welcome the opportunity to explore the market in search of optimal solutions.”
“BTL landlords continue to face the challenge of increased regulation and rising taxes. They aim to run their real estate businesses as efficiently as possible. Many rely on professional guidance in this endeavor. It will happen.”
“Arrears will continue to fall from very low levels as interest rates fall and almost a third of remortgages will be repaying from fixed contracts by 2025, facing lower cost mortgages. This is good news for borrowers and lenders alike, reflecting both the effectiveness of lenders' initial underwriting processes and their flexibility to assist borrowers in distress.”
“In a growing and increasingly competitive market, mortgage advisers will play an even bigger role in helping borrowers find the best solution for their individual needs in 2025. The proportion of business going through mortgages will break the 90% barrier by 2026, for the first time in the history of the market. ”
Meanwhile, Coventry's head of intermediary products Ian Biggs said he was “cautiously optimistic” about 2025.
“As base interest rates are expected to fall, we expect mortgage rates to follow suit, creating a more favorable environment for borrowers,” Biggs said. The size of next year's maturities will also play a role in driving activity, which should bode well for the overall market. ”
“While volatility such as changes in swap rates has been an issue this year, recent interest rate easing has provided stability.The market is not expected to contract compared to this year, and in fact, growth There is room.”
Similar to IMLA, Biggs expects continued activity in the BTL sector, particularly in refinancing existing portfolios.
But he says the real growth area will likely be in BTL limited liability companies.
He said: “In the face of increasing tax burdens, many landowners are considering limited company structures as a more tax-efficient alternative to traditional ownership.”
“This strategic shift will enable landlords to mitigate cost increases while optimizing their portfolio. It also opens new avenues for expansion, staying competitive and changing market conditions. be able to adapt.”
finova sales director John Tilsey is also cautious about next year. He said: “Expectations for a strong recovery in trading volumes have eased in recent months, but trading levels remain weak, with Saville's recent forecast showing that UK trading values are expected to rise by 4% in 2025. It is likely to be below the long-term average.”
“Similarly, recent budget changes have resulted in revised expectations for interest rate cuts. The pace of monetary easing is likely to slow, particularly due to inflationary pressures from national insurance increases and rising gold and silver interest rates.”
“Reducing the Stamp Duty Land Tax (SDLT) free threshold for first-time buyers from £425,000 to £300,000 could result in an additional tax liability of £6,250, which would increase the demand for this key group. may only further suppress activities that could reduce the number of second-home SDLTs and increase second-home SDLT. ”
“But it's not all doom and gloom. Further interest rate cuts, reduced house price growth and above-inflation wage increases, particularly in the public sector, are expected, which will reduce affordability for many buyers. should be improved.”
“The budget wasn't perfect, but it could have been worse. With the worst of the tax hikes behind us, confidence should increase in 2025. We could see a strong push to complete.'' We were able to meet the April 1, 2025 deadline and start the new year on a positive note. ”
And Tony Hall, head of business development at Saffron for Intermediaries, said next year would be a “pivotal” year for the industry.
Hall explains: “The UK Treasury forecasts £216bn in new business creation and £195bn in product transfers, creating a market of almost £5tn. In 2024, around 1.6 million borrowers will It's out of the mortgage product, and it's likely to be the same next year.”
“This will highlight the critical role of brokers, who arrange 90% of mortgages, and highlight their value in navigating increasingly complex market conditions.”
While there is a sense of optimism, Hall suggests there will be “inevitable challenges along the way.”
However, he commented as follows: “These hurdles are an opportunity for brokers and lenders to showcase their expertise and adaptability. As borrowers' situations become increasingly complex, lenders like us have the ability to meet diverse needs. We have an opportunity to shine by providing customized solutions.”
“The increased reliance on brokers highlights the critical role intermediaries play in helping customers achieve the best possible outcomes for their needs.”
