Rob Jupp, group CEO at the Brightstar Group, believes that the majority of business written in 2024 could take place in the second half of the year.
Speaking in a recent video conversation with Chris Kirby, head of sales & specialist distribution at The Mortgage Lender, Jupp (pictured) flagged the current environment of stalemate that many brokers are experiencing given the rate conundrum faced by borrowers and the potential impact of the upcoming 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 bps – so what do we do? How do we placate those people when rate 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. 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.”
During the conversation, the pair discussed the importance of signposting all options for a customer based on their circumstances and risk appetite, the role that innovative product design will play in helping borrowers to deal with payment shocks, technology and the ongoing importance of human expertise and the impact of the upcoming General Election on the property market.
Jupp highlighted that the one thing markets don’t like is uncertainty and, on the assumption that there will be a majority government elected in July, there should be greater certainty in the second half of 2024 than the first half.
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% v 35% in favour of H2 2024. We are predicting a very strong second half to the year.”