Lesley Cappellaro, Intermediary Regional Manager at Barclays, delves into the challenges within the property market, and the resiliency which helps her team overcome them.

As an Intermediary Regional Manager at Barclays, I work mostly across the West of the UK – from Cornwall and Devon to Wales, as well as the midlands and Sheffield – supporting my team of Business Development Managers to deliver a first-class service to our partners. We are in daily communication with mortgage brokers to help them to understand the products Barclays has to offer, as well as provide unique tools and services to help them deliver for their clients.

From the conversations I’ve been having with mortgage brokers in 2024, I know the property market is challenging for many at the moment. Affordability is the biggest issue that we’re seeing – leading to fewer people being able to get on the housing ladder. Although mortgage rates have come down, a higher proportion of people’s spending is going towards their mortgage repayments or rentals. Last month, mortgage and rent spending reached a 14-month high, increasing 8.2% year-on-year, according to the latest Barclays Property Insights report.

The UK remains hugely aspirational when it comes to homeownership, but for first-time buyers, it has undeniably become harder to do that amidst a low supply of housing and increasing house price to income ratios. In my region, we are seeing that disparity grow, but, even in higher income areas like London it’s an issue, as the property prices are even higher. Meanwhile, would-be first-time buyers also face spiralling rent which holds them back from saving enough money for their first deposit.

Our Property Insights data shows that 59% of renters agree that the cost of a deposit is one of the biggest barriers to buying a home, compared to 45% who cite mortgage payments. In a sense, this comes down to “you don’t know what you don’t know”. If you’ve never had a mortgage, it’s hard to know what it feels like to go from a sub-1% interest rate environment to today’s 4.75%, although you may have felt the knock-on effect on your rental costs. As a result, today’s first-time buyers are less concerned about current interest rates than existing mortgage holders, because they still see a mortgage as being a more affordable option than renting.

While we’ve seen a lot of volatility in the mortgage space recently, the market – and the people who work in it – are highly resilient. While first-time buyers have experienced lots of change, existing homeowners too have had to adapt. Through our broker partners, we have seen re-mortgaging (moving to a new mortgage with a different lender) slowing down, whereas more clients are questioning whether they should do a rate switch (sticking with the same lender, but switching to a different rate or product). The net result is that we’re still seeing a lot of demand, just in a slightly different way – it’s been a busy year for mortgages. As repayments become more expensive, more people are also signing on for extended mortgages. It’s increasingly common to have a mortgage when you’re older, so I think it will be a trend for the long-term.

Aside from rising costs and an oversubscribed housing stock, changes to Stamp Duty are also having an impact on the property market across the board. When it comes to new build properties, there will likely be a rush for completion ahead of the changes in April 2025 to avoid increased costs. Clients are asking their brokers how these shifts will affect them – and how much money they’ll need to save to get onto the property ladder in the future.