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Return to normal market in April may allow more rate competition – Murphy

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  • 23/11/2020
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Return to normal market in April may allow more rate competition – Murphy
A return to more normal levels of demand in the mortgage market once the stamp duty holiday cut-off has passed may mean more competition on rates from lenders.

 

A drop off in activity in the second quarter of 2021 should not be feared and may benefit lenders, brokers and borrowers, according to JLM Mortgage Services head of mortgage finance Sebastian Murphy.

Speaking on Mortgage Solutions Television in association with Accord, Murphy said: “I think most lenders and ourselves would welcome the market returning to a more normal market.

“We don’t see the market falling off the edge of a cliff.

“We just see a return to perhaps a bit more of a normal market and that might allow a bit more competition for rates and that could be a good thing for consumers, so it’s not anything to fear.”

Murphy added that he expected the market to remain strong post-March 31.

“The stamp duty holiday coming to an end is a very minor part of what’s happened to the market. A lot of it is natural migration where people want to move and need to move,” he added.

 

 

This was echoed by Accord director of intermediary distribution Jeremy Duncombe who added that the underlying housing market was fundamentally strong.

But he warned there could be capacity challenges ahead until then and that would need careful monitoring for brokers and their clients.

“I am expecting a capacity challenge for particularly the legal profession, the conveyancers and lenders as well,” Duncombe said.

“So that will impact brokers and I think some of those managing messages need to start now.”

SimplyBiz head of strategic development Richard Merrett agreed about the issue of capacity within the market getting worse.

And he added that brokers should be preparing their businesses for as many eventualities as possible, including cherishing clients.

“Diversify your business as best you can, so you aren’t just a home for purchase and remortgage – and if that means you don’t have the capacity to do it yourself then know when to refer it on,” he added.

 

 

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