In the first of a series of Mortgage Panel Debates hosted by United Trust Bank (UTB), the lender brought together a group of experts from across the mortgage sector, including representatives from networks, clubs and distributors, to discuss the current state of the mortgage market.
The panel dissected the challenging year that was 2023, assessed the major challenges and opportunities in the current market, and shared predictions for the upcoming year.
Chair Caroline Mirakian, sales and marketing director – mortgages at UTB, quizzed panellists regarding their house price and mortgage predictions for the remainder of 2024.
Vikki Jefferies, proposition director at PRIMIS Mortgage Network, remained optimistic in light of recent January figures.
Citing a strong maturities market and ongoing resilience in the form of a buoyant estate agency sector, Jefferies said that the year had gotten off to a “positive start.”
James Tucker, founder and CEO of Twenty7tec, noted that the platform recorded its busiest ever week for mortgage searches the week beginning Monday 12th February.
However, whether this promising trend of buyer demand is set to continue – Tucker remained unsure.
2023 in review
Neil Hoare, commercial director of HL Partnership, held high hopes for the product transfer market in 2024.
Hoare expects the popularity of this product to continue, despite external factors affecting the market.
Matthew Arena, group managing director of Brilliant Solutions, cited the ongoing instability of the wider market as a problem for both brokers and lenders alike.
Due to the troubling economic and geopolitical events of 2023 which squeezed mortgage markets, such as high interest rates and tensions in Europe and the Middle East, Arena said it was “hard for businesses to look ahead.”
With brokers dealing with decreased enquiry numbers, and lenders being forced to change rates at a rapid pace – Arena urged businesses to look forward.
“Businesses need to get their head up, and look ahead”, he said.
With a more promising market predicted for the remainder of 2024, Arena encouraged firms to seize this opportunity and increase productivity where possible.
Broker pressures
Focusing on the more positive aspects of the market, Hoare noted a recent statistic published by The Intermediary Mortgage Lenders Association (IMLA) which found that 89% of mortgage business that was conducted last year was done through intermediaries.
Nevertheless, Jefferies highlighted most brokers still started out the year with some of the lowest business levels and smallest pipelines seen in the past couple of years.
According to Jefferies, client expectations are currently higher than ever before, with the rise of social media and comparison sites leading to growing consumer awareness about the market.
This growing awareness, which Jefferies dubbed “the Martin Lewis effect,” has placed increased pressure on brokers.
This highlights the growing need for support, Jefferies argued, as she urged lenders, networks and clubs to band together and help brokers adapt to shifting consumer trends.
Arena agreed, stating that while client expectations are higher than ever before, this may not necessarily be a bad thing.
As brokers are forced to improve their service levels and raise the bar in terms of advice due to more demanding market conditions, Arena said this would lead to wider improvements within the market.
In his view, as advisers are increasingly being held to higher standards, particularly under the Financial Conduct Authority’s (FCAs) Consumer Duty protocols, advice will become more valuable than ever before.
Adopting technology
In a rapidly changing market, coupled with a more informed client base, panellists discussed the increasing use of technology – and its potential to alleviate broker pressures.
According to Tucker, adviser numbers have come down of late, due to brokers finding different ways to drive efficiencies through tech and lowering overheads.
Arena noted that a lot of brokers find themselves passing over complex cases due to time constraints.
By adapting new technologies, he argued that brokers could not only handle more cases, but also increase profits in the process.
However, as valuable as technology could be to a smaller brokerage, Tucker said that a lot of brokers are reluctant to invest in new, and often expensive, tech options.
He argued that given the amount of value that tech could inject into a business, “pushing the price down,” is counterintuitive in the current market.
Government intervention
In what is set to be one of the biggest election years in history, the upcoming UK General Election will undoubtedly have a major impact on the housing and mortgage market.
With both Labour and the Conservatives set to tout different approaches to housing policy, panellists remained unsure as to whether the discourse would materialise in actual policy.
Hoare noted the ongoing confusion surrounding current Government policy, particularly when it comes to support for first-time buyers.
Despite discussion of the return of Help to Buy and 99% mortgages, there has been little tangible sign of intervention from the Government thus far.
In his view, Government should not only improve conditions for struggling first-time buyers, but they should also roll back on restrictive buy-to-let (BTL) policy, which is driving landlords from the market, and introduce Stamp Duty payments on the sale of a property, rather than purchase.
When it came to solving the wider housing crisis at large, Jefferies also called for more clarity surrounding policy.
Citing struggles in a number of areas, such as the state of social housing across the UK, the affordability pressures on middle earners when it comes to mortgage payments, as well as the lack of housing stock, Jefferies said Government should be doing more to tackle all areas of the housing market – in addition to providing further support for first-time buyers.
Amid these calls for further intervention, attention turned to the Government’s current Mortgage Charter scheme, which aims to provide brokers and borrowers with extended notice in advance of product changes.
Regarding the scheme, Phil Daffern head of lender relations at SimplyBiz, called for further collaboration between Government and brokers, rather than just mortgage lenders.
“The Government should consult people who are dealing with most of the business,” he said.
Jefferies agreed: “It’s about the people working on the ground.”
Consultancy and collaboration
With a market crying out for Government support, panellists were asked, what, if anything, can be done by key industry figures to open a constructive dialogue.
Noting the existing efforts of industry trade bodies such as The Association of Mortgage Intermediaries (AMI) and IMLA, panellists called for further collaboration between all areas of the mortgage sector.
“Our market should have a seat at the table,” Jefferies said.
“Lenders and distributors need to collaborate. It can be dangerous if we share opinions from only one or two niche areas of the market.
“Anything we say should be reflective of all areas of the mortgage market.”
Advocating for further collaboration not only with the Government, but internally within the market as well, Hoare underscored the importance of lenders reaching out to their broker partners.
Citing ongoing broker challenges about new product launches and rate changes, he said that lenders should improve aim to improve education when bringing new mortgage offerings to market.
He added: “Lenders should provide more detail around their product launches, such as who the product is for and any additional background to help meet the requirements of Consumer Duty.
“A consultation between brokers and lenders early in the development cycle could open a dialogue to help brokers advise on new products or propositions that come to market.”
Final thoughts
Finally, panellists were asked to provide advice for brokers as they go forward into the remainder of 2024.
Tucker urged brokers to “take themselves and their businesses seriously,” thus demonstrating the value of advice in the current market.
He said: “People take the industry more seriously [now], and value advice rather than a transactional relationship.”
Others agreed, urging brokers to continue elevating and growing their businesses, focusing on developing their own companies rather than larger market concerns.
In closing, Daffern added: “Brokers should give themselves a pat on the back.
“It was a hard 2023 but look to 2024 as a positive.”
