Blog: The future of the mortgage market is in our hands | Mortgage Strategy

Img

After well over a year spent working with our adviser network on a remote-only basis, it was a pleasure this month to restart our in-person events.

I’ve been travelling to meet with advisers across the country and it’s been amazing to hear about how so many have overcome the challenges of the crisis.

It’s also clear that advisers are keen to explore ways of improving their businesses, while developing their personal skills to ensure customers have access to the best advice.

Overall, though, the sense I get from advisers is that they feel positive about the future. While the year to date has been a tough one, there are many signs that point towards a good business pipeline as we move forwards, especially in relation to the refinance market.

There’s been a gradual slowing to overall activity from the June and July highs, but our broad data points suggest a case for optimism. The Bank of England’s monetary policy committee also provided a reassuring message, this month. Its sense is that there is little evidence to suggest the market is coming unstuck. Responsible lending practices remain, and many households have significant savings put aside to boost financial wellbeing.

Advisers must reassure borrowers

Advisers have an opportunity as the point of contact with borrowers to provide reassurance. There have been unhelpful headlines recently that future rate rises could lead to significant mortgage price increases at a time where other household expenses are going up.

However, whilst on the balance of probabilities, rate rises look likely and swap rates have already begun this journey, we must remember they will be from historic lows and competitive pressures could mean there isn’t a direct correlation between bank and mortgage market rises. Large banks currently have bumper liquidity and the UK property market is viewed as a great opportunity to utilise this.

This may help to curtail some of the rises and for many, recent house price increase could mean moving to a lower LTV bracket. Therefore, perhaps the most important message is that there has never been a better time for consumers to seek advice and take advantage of the current environment whilst it lasts!

Take a breath

There’s certainly a need to pause for thought now. Many have been riding high on the frenzied stamp duty holiday period but even in the wake of government incentives, the market remains buoyant. And with a normalising pipeline, we can begin thinking ahead to the future. There’s a lot to be done between now and then, but it’s also not too early to be thinking ahead to 2022.

The mortgage market will emerge in a good position, however, there are still challenges that remain. COP26 is fast-approaching, and the world will be watching to see how world leaders expect to tackle climate change.

As part of this, our community needs to create its own strategy to help underpin the UK’s green agenda. The mortgage market cannot afford to square this away as simply a box ticking exercise, instead we need to be a driving force that helps affect real positive change.

Another key discussion point relates to technology. The mortgage market must keep pace with others to meet the raising expectations of customers. We’re already working with several broker firms to implement tech that can help advisers and customers access a mortgage faster and we will continue to collaborate across the market to help bring us closer to a frictionless mortgage journey.

Finally, a challenge that impacts us all – creating a more diverse and inclusive community. By now, most know well that to be at our best, we need to create organisations that are as varied as the customers we serve.

However, the mortgage market is only at the start of this journey. The Association of Mortgage Intermediaries has been doing good work in this area and its Viewpoint report – released today – raises some important questions about what needs to be done. I hope that people do stop and think about what the findings say about us as a community and spur themselves and their businesses to make tackling this issue a priority.

There are plenty of reasons to be positive about the future but, ultimately, it all rests with us. We can shape the coming months for the benefit of industry and customers and we should relish in that. Let’s make our future a good one for customer, employees and, crucially, the environment.

Kevin Roberts, director, Legal & General Mortgage Club


More From Life Style