Despite the challenging rate environment, Pick expects to see the market remain robust in the new year but warned that it will “take time” before there will be a return to the rates seen at the beginning of 2022.
“As rates gradually edge down over the year, we are likely to see more higher net worth customers look to mitigate the impact of the frozen inheritance tax threshold as well as any poor performance of pension assets by using their property wealth,” Pick told FTAdviser.
“Supporting children with house deposits is likely to remain popular – especially as Hunt was clear that the changes to stamp duty are not permanent and will be reviewed, if not changed, by March 2025.”
Pick noted that the performance of the housing market will have an impact on consumer confidence which will impact the sector.
Although prices are expected to fall over the next two years Pick said: “this needs to be seen in the context of substantial growth over the last 10 years”.
In addition to this, the More2life director flagged the consumer duty as a key area of change for the sector in the new year.
“Given the scrutiny the later life lending market has come under before, we know that a lot of advisers already exhibit much of the necessary behaviour but brokers should take time to document, test and ensure that what they see as good outcomes is in line with the rest of the market,” Pick said.
jane.matthews@ft.com
