Podcast #58 - Predictions for 2021 with UK Finance and IMLA (part two)

Added 01/04/21 - 2 min read

In episode 58 of the Growth Series podcast, Jeremy Duncombe, Managing Director at Accord Mortgages, is joined by Charles Roe, Director of Mortgages at UK Finance, and Rob Thomas, Principle Researcher at the Intermediaries Mortgage Lending Association (IMLA). In this episode, Jeremy, Charles and Rob discuss their recent reports about the state of mortgages for 2021. This episode is part two of a two-part series.

Listen to part one here.

Jeremy kick-starts the second half of the conversation by asking our guests about the outlook for the wider economy. He also asked whether they felt that the impact of the pandemic had masked the effects of Brexit. Both Charles and Rob comment on the Help to Buy scheme being a key factor in the buoyancy of the market around first-time buyers. While Charles views the effects of Covid-19 and Brexit as relatively separate entities, Rob suggests that the changes in immigration numbers may have an impact on housing supply and demand.

The trio go on to explore affordability and stress rates in light of the current market conditions. Both Rob and Charles agree that the implementation of current rates was right for the time that they were created, but that continuous review is key to their continued success.

Rob, however, mentions that affordability stress tests could be the reason some buyers who may otherwise be able to start the buying process have yet to start. Charles takes a more cautious view, commenting that unexpected events like we have seen over the last year have had less impact than they may have without the stress testing.

From there, Jeremy asks Rob and Charles to discuss what they think brokers should be focusing on in the coming year.

From Charles’ view, the extension to Stamp Duty holidays should be welcomed and brokers should be aware of increased demand ahead of key dates. He also advises that brokers should be thinking about the impact of certain government support schemes (such as furlough and payment deferrals) coming to an end. He suggests that brokers look at unemployment rates, major redundancies and where post-Covid spending is focused.

Rob reminds brokers that the increase in house prices is unlikely to come down this year, particularly with the potential influx of first-time buyers. He asks that brokers consider how those who have taken advantage of payment deferrals may be impacted for future mortgages. He agrees with the importance of the figures Charles suggests and adds that there may be a chance of rising inflation if money saved during lockdown is spent quickly post-Covid.

Jeremy asks both Charles and Rob what the priorities they and their organisations will be focusing on for change. Both agree that work needs to be done with the green agenda to ensure that a fair, holistic approach is taken across the board. Charles and UK Finance will also be focusing on safety remediations and Support for Mortgage Interest (SMI).

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