As 2024 draws to a close and lenders begin to look ahead to the marketplace in the new year, we at Hinckley & Rugby Building Society believe affordability and flexibility will remain key factors influencing the market.
The cost-of-living crisis has brought significant changes to borrower behaviour and needs, creating new opportunities for brokers and lenders who can adapt to meet these demands.
EVOLVING BORROWER PROFILES AND FLEXIBLE PRODUCTS
Looking ahead to 2025, the Bank of England’s recent report highlights a significant challenge for many mortgage borrowers. Approximately 4.4 million borrowers are expected to face higher repayments in the coming years due to rising borrowing costs, with around 420,000 potentially seeing their monthly payments increase by over £500. This stark reality underlines the growing importance of flexible mortgage products in the year ahead—products designed to adapt to borrowers’ evolving financial circumstances and provide relief in navigating these challenges.
We are also witnessing a growing number of borrowers relying on diverse income streams, such as part-time work, self-employment, or fluctuating earnings from bonuses, tips, commissions, and even modern platforms like YouTube and TikTok. These non-traditional income sources, once overlooked, are now becoming increasingly common as people adapt to new opportunities for generating revenue. However, they can complicate mortgage applications under conventional lending criteria.
At Hinckley & Rugby, we anticipate these trends will continue into 2025, driving demand for products like our Income Flex mortgage, which is designed to accommodate borrowers with non-standard income profiles. Take for example, our changes to accept 100% of tips, stipends, and lodger income. These have already proven vital for clients in hospitality, education, and other nuanced sectors.
OPPORTUNITIES FOR BROKERS IN 2025
The coming year will also present opportunities for brokers to deepen their relationships with clients by offering personalised advice and solutions. With affordability remaining a critical concern, brokers can play a pivotal role in guiding clients through the complexities of the mortgage process.
For instance, borrowers looking to secure a new property or refinance existing arrangements will benefit from brokers’ expertise in identifying the most suitable products. Brokers who can navigate the intricacies of flexible lending criteria and provide access to solutions such as ours, will be well-positioned to thrive.
ADAPTING TO MARKET CHANGES
While 2025 may bring further regulatory and taxation changes, we’re confident in the market’s resilience. Borrowers and lenders have consistently shown their ability to adapt, transforming challenges into exciting opportunities.
As a mutual organisation, Hinckley & Rugby Building Society is committed to evolving alongside our broker partners to meet the needs of a changing market. Our ethos of flexible, relationship-driven banking ensures we remain a trusted partner for brokers plotting the challenges and opportunities ahead.
With 2025 on the horizon, we anticipate a year filled with growth and innovation, and we are excited to support brokers and their clients in turning their homeownership aspirations into reality.
