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Diary of a broker on the frontline of mortgage mayhem

Restless days: Sebastian Murphy (pictured) is group director of JLM Mortgage Services, a Hitchin-based brokerage that handles 12,000 home loan applications each year

The mortgage market descended into chaos last week as interest rates feared to hit 6% next spring.

As group director of JLM Mortgage Services, a Hitchin-based brokerage that handles 12,000 home loan applications each year, 48-year-old Sebastian Murphy was on the front lines of the chaos.

Here he tells Fiona Parker how the week went – ​​and gives his best advice to borrowers…

Restless days: Sebastian Murphy (pictured) is group director of JLM Mortgage Services, a Hitchin-based brokerage that handles 12,000 home loan applications each year

Restless days: Sebastian Murphy (pictured) is group director of JLM Mortgage Services, a Hitchin-based brokerage that handles 12,000 home loan applications every year

September 23

It’s 7am and I’m at my desk. As a director of the company, I still write about 30 mortgages a month and spend a lot of my day talking to clients. Like any broker, we help clients find the best deal for their situation. The past two years have been chaotically busy, and I hope today’s mini-budget will bring some stability.

The stamp duty reduction rumor was concerning, but luckily this one won’t pour gasoline into the market as it’s not as generous as the discount offered during the pandemic and there’s no time limit limit.

Since February, it has become the norm for lenders to reassess mortgage offers weekly rather than once a month or so.

Shortly after the mini-budget, as the pound falters, Halifax confirms it will reassess offers early next week.

Hopefully this won’t be the first in a long series.

September 26

The pound fell. Halifax is not just re-evaluating offers, but withdrawing all fee-based home loans.

This afternoon, Virgin Money announces that it will remove all new customer mortgages by 8pm tonight. Other lenders soon follow. Everyone is on deck for our 110 brokers as we call to let borrowers know what’s going on.

On a normal day, I talk to about 20 clients. Today, I have more than 60. These conversations are not easy. Most of them are with people looking to remortgage.

When you tell someone paying 2% interest that their best bet is a 4% deal, you can’t be offended if they wonder if that’s really the case.

If a customer wants a fixed offer, we make it clear to them that they need to act quickly before it disappears. Fortunately, most buyers we talk to are able to negotiate asking prices with sellers and don’t have to back out of sales.

But many first-time buyers want to know if they’d better wait for cheaper rates to return. Our brokers stay late to cope with the workload and some are still in the office at 11 p.m.

Sad reality: Customers currently paying around 2% interest are being told their best bet is a 4% offer

Sad reality: Customers currently paying around 2% interest are being told their best bet is a 4% offer

September 27

Mortgages are drawn down en masse and quickly. Nationwide, Britain’s biggest lender, confirms it will raise five-year rates for borrowers with 5% and 10% deposits.

Clients start to panic and brokers wake up at 6am to find half a dozen emails already in their inbox. Some customers contact us at 4am because they can’t sleep.

WhatsApp messages and SMS also arrive at any time of the day and night.

Even those who manage to strike a deal aren’t necessarily thrilled with the outcome.

I get a call from a customer whose 1.45% plan is about to expire. Another broker offered him an offer of 3.11%, but that was ten days ago. Today, the best it can get is a 4% correction over five years.

He agrees, but it means he will pay an extra £3,240 each year. That’s more than anyone worried about his energy bill going up.

Many first-time home buyers want to know if they should wait for cheaper rates to return

Many first-time home buyers want to know if they should wait for cheaper rates to return

September 28

I wake up wondering how many offers will disappear today.

It usually takes five minutes before I can sign someone up for an HSBC mortgage. However, yesterday I waited two hours after leaving at 1092 in the queue. Later, the bank confirms that it will no longer offer mortgages that day.

That means we all got up early this morning, hoping to get the rates customers wanted yesterday.

I try to increase my chances by logging in with my laptop and smartphone simultaneously. I have personally taken out 27 mortgages in the last 48 hours.

September 29

Sobering headlines confirm that nearly 1,000 mortgages have been taken out since Tuesday morning.

Fortunately, some lenders are still allowing existing customers to switch to new offers with them and we are starting to focus on these applications – having previously prioritized borrowers who wanted to switch to another bank or building society.

I’m exhausted and I think some of these proposed rates are unreasonable. Some lenders are clearly setting high rates because they can’t keep up with the increased demand.

September 30

Some borrowers are very upset and I am speaking to a particularly distressed woman whose mortgage is due to expire in August next year.

Even if she were to strike a new deal now, before rates rise further, the best option available will increase her repayments from £1,400 to £1,750.

She worries that she can’t afford such an increase and other rising costs, and her tears force us to interrupt our conversation a few times.

It’s heartbreaking.

Currency crisis: After the pound fell in response to Chancellor Kwasi Kwarteng's ill-received mini-budget, the mortgage market was immediately hit

Currency crisis: After the pound fell in response to Chancellor Kwasi Kwarteng’s ill-received mini-budget, the mortgage market was immediately hit

October 3

News of the government’s U-turn is prompting customers to start asking if cheaper fares will return. So far, that is not the case.

A borrower is offered a 6.14% solution over two years by Santander, his current lender. We haven’t seen rates this high in over a decade.

Unfortunately, there is no way of knowing what will happen in the months to come.

But if you’re less than six months away from expiration on your contract, it might be worth getting another fix today, ready for when you remortgage. Just be sure to ask about exit fees.

I’m not convinced that trackers that currently seem cheap are a good idea if rates are going to continue to rise.

But whatever you do, don’t switch to a standard variable rate.

f.parker@dailymail.co.uk

  • JLM is a group of market intermediary firms which collects fees from lenders in return for the advice and recommendations it offers to borrowers. Around 5% of customers – those applying for smaller loans – may have to pay a fee, which is capped at £595.
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