In episode 77 of the Growth Series podcast, Jeremy Duncombe, Managing Director at Accord Mortgages, speaks to LDN Finance’s Chief Operating Officer Greg Cunnington and Mortgage Adviser Heather Greatorex about the recent turmoil in the mortgage market and what happens next.
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Jeremy begins by asking Greg how the past few weeks have been from a broker perspective, and he describes it as a busy and stressful period, with many brokers consistently working 12 to 15 hour days.
However, Greg says he is proud of the industry’s response to the crisis, as everybody has put their clients first. He also notes that relationships between lenders and intermediaries are much stronger than they used to be, which has helped the situation and enabled advisers to give better information to their clients.
Greg then asks Jeremy how Accord prices its products and what its thought processes have been over recent weeks. Jeremy says that swap rates, which Accord relies on for pricing fixed rate products, went up by over one per cent in a day. As a result, it’s been a challenge to protect service levels and price products at the right point so loans remain profitable.
However, Jeremy stresses that Accord still wants to lend to first-time buyers and that it brought those products back as soon as possible, while working to protect its service levels.
Jeremy then turns to Heather to ask how she has found the challenge of having to advise clients when rates are higher than when they previously fixed. Heather admits it has been very difficult, particularly dealing with clients who fixed two years ago at one or two per cent and now have to fix at rates of five to six per cent.
She says this big jump means now is the time to speak to an intermediary who can tailor their advice for individual clients.
Next, Heather asks Jeremy if we can expect to see some more innovative products in the market outside of the normal ranges. Jeremy believes the current climate creates an opportunity to innovate on products and propositions. For instance, he says Accord is currently working to better service under-served customers, such as self-employed people and contractors, as well as reinventing old products to suit today’s marketplace.
Jeremy then asks Greg whether he has seen any change in client behaviour in the last few weeks. Greg believes the recent crisis has led to many clients realising how important their mortgage is, as when rates have been low, it’s been less of a priority to them, whereas now they are really focused on their expenditure.
Finally, Greg asks Jeremy what he makes of the new Chancellor Jeremy Hunt’s announcements, what impact it will have on the markets and lenders, and what other challenges lenders will face as we approach the end of 2022.
Jeremy states that reversing the Mini Budget has made a positive difference, and that having stability and a costed plan is really important. However, he predicts that global challenges such as high energy prices and the Ukraine war will persist into 2023, which will continue to affect confidence in the housing market over the next year. This, he says, could potentially lead to a drop-off in the number of new-build homes and first-time buyers.
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Accord Mortgages Limited is authorised and regulated by the Financial Conduct Authority. Accord Mortgages Limited is entered in the Financial Services Register under registration number 305936. Buy to Let mortgages for business purposes are not regulated by the Financial Conduct Authority. Accord Mortgages Limited is registered in England No: 2139881. Registered Office: Yorkshire House, Yorkshire Drive, Bradford BD5 8LJ. Accord Mortgages is a registered Trade Mark of Accord Mortgages Limited.
References to 'YBS Group' or 'Yorkshire Group' refer to Yorkshire Building Society, the trading names under which it operates (Chelsea Building Society, the Chelsea, Norwich & Peterborough Building Society, N&P and Egg) and its subsidiary companies.
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