Jupp (pictured) made his comments while speaking to Chris Kirby, head of sales and specialist distribution at The Mortgage Lender, in a video discussion. 

Jupp said the current “stalemate” being experienced by brokers was due to uncertainty around the direction of rates and the impact of the general election. 

He said: “A lot of brokers tell me that it’s a bit of a phony war at the moment. I’m told that a lot of customers are just waiting, whether they have a need to refinance or want to make a purchase. They might even actively be in a transaction, but they don’t want to complete because they believe that better rates are around the corner.

“In complete contrast to that, in May, swap rates went up by 40 basis points – so what do we do? How do we placate those people when rate[s] in the money markets have actually gone up?” 

Kirby added: “From my perspective, if you look at the market we’re in now, a two-year fixed rate is more expensive than a five-year, which is unusual in comparison to recent history. The markets are already pricing in predicted changes to rates in terms of base rate and cost of funding. For brokers talking to customers who are maybe looking to purchase, it’s worth pointing out that if they want to buy the property, there’s no guarantee that it will still be available if they wait for six months.

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“For those customers who are looking to buy, I’d just encourage them that if they see a property they like, to speak to a mortgage broker today and get clarity on what is achievable with their circumstances. Understand what their budget is, what they can afford and go for it.” 

 

Certainty to come 

Jupp and Kirby mentioned the importance of recommending a wide range of options to clients based on their circumstances and risk appetite, and how innovative product design might help borrowers dealing with payment shocks and technology.

The pair also spoke about the need for human expertise and what the general election might mean for the property market. 

Jupp said the markets did not like uncertainty, and assuming there will be a majority government elected this week, this should provide more confidence over the rest of the year. 

He said: “If you consider a standard year to have a 50/50 split between the first half of the year and the second half in terms of business volumes, we think the split for the market this year will be more like 65% versus 35% in favour of H2 2024. We are predicting a very strong second half to the year.” 

The full video discussion is available to watch now here.