Springtime for mortgages

11 Mar 2011

In my last blog I questioned when we might have some clarity regarding the Mortgage Market Review particularly when it came to a suggested timetable of potential rule changes.  Far be it for me to suggest that Hector Sants is an avid reader of my blog but days later, in his speech to the BBA, the chief executive of the FSA answered some of those very questions I had put forward.

For those who believe the last thing the mortgage market needs in 2011 is more regulatory change, the speech provided some welcome news.  Sants revealed that the FSA will publish its regulatory framework for MMR this autumn, and it will be preceded in the summer by a full impact analysis which will consider both the conduct and prudential perspective.  He also clarified there will be no rule changes for the mortgage market to digest before 2012, a decision which may give the industry a small degree of solace.

However, perhaps the major positive from this announcement is the acceptance that the regulator is still in full-blown consultation mode when it comes to MMR.  There remains a real opportunity for further communication regarding the proposals that have been published to date and the industry can continue to lobby with all its might to ensure that some of the (quite frankly) unworkable and unpalatable ideas that have already been floated by the FSA do not make it to the rule book.

Clearly MMR will be a major issue to be confronted throughout the rest of the year but I sincerely hope that the industry is now able to get on with the business of developing a far healthier marketplace, rather than being stunted by the potential for further MMR-based rule changes.  With this now ruled out, at least in 2011, we should all be focused on the job in hand.  Yes, some lenders may already be shaping their business for MMR regardless, however, there will be no dotting of the i’s or crossing of the t’s until next year at the earliest.

We have perhaps already seen evidence that the market is working hard to mend itself and is confronting the issues which have stopped it from moving forward at a much quicker pace.  There has been a recent healthy dose of new 90%-plus LTV products put back into the market with the specific aim to get more first-time buyers onto the property ladder.  The amount of lending that will take place at such levels remains a moot point however we should all be reminded that even the longest journey begins with a single step.  Maximum LTVs have now been creeping up for quite a while and to see a much more competitive 90%-plus market is a welcome sight.

Intermediaries should also be enthused by signs of life in the remortgage marketplace – a sector which has hardly been the healthiest in the last couple of years.  All signs appear to show us on the cusp of the first Bank Base increase from its historically low 0.5% position; the money markets suggest May to be the likeliest month and with this ‘feeling’ seeping into the mindsets of the many thousands of borrowers still on their lenders’ SVRs, it is to be hoped that brokers can anticipate and capitalise on the far greater remortgaging interest that is beginning to show itself.

We recently urged brokers not to wait for potential remortgage clients to come to them, instead plant the seed of what is available right now with those who may well be looking to secure a new product.  Now is the time to let them know what the market is really like in terms of lender appetite, criteria changes, and product offerings.  Their perception of the market may be far different from reality especially if the last time they remortgaged was over three years ago.  Also, many potential remortgagors may find they are the borrowing equivalent of persona non grata, especially if they have been in any way, shape or form ‘specialist’ in their mortgage needs.  Finding this out before a rate rise and the subsequent remortgage ‘loan grab’ could be a blessing; they are much more likely to find a deal prior to a massive influx of interest than joining the back of the queue when the MPC do finally make the decision.

So, as we step into Spring there could well be a more positive feel to the mortgage and housing market; it is therefore imperative that brokers are positioned at the front of the field to (as Linford Christie used to say) ‘start on the B of the Bang’.


Bob Hunt

Blog Archive

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Brokers’ fortitude will see them through this ‘depressing and dispiriting’ situation 
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Paradigm CEO Hunt invests in mortgage switching platform Dashly 
19 Nov 2018

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16 Oct 2018

Long-term fixes fail to catch on 
01 Oct 2018

Mortgage market must ensure it deals in Project Clarity 
21 Sep 2018

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11 Sep 2018

A deeper look at the state of the UK lending market 
17 Aug 2018

Understanding product transfers 
30 Jul 2018

‘Go compare’ is not so ‘simples’ 
26 Jul 2018

It’s worth looking into later life lending 
05 Jun 2018

SVRs are a cash cow for many mortgage lenders 
04 Jun 2018

Leaving a network should be more straightforward 
08 May 2018

Not all later life customers are in the same boat 
03 May 2018

Advisers must beware leasehold ‘minefield’ 
16 Apr 2018

It’s just not cricket 
12 Apr 2018

Proc fee timescales are way off 
29 Mar 2018

Broker-lender relations have undergone a fundamental shift 
28 Mar 2018

Opening at weekends shouldn’t be a priority 
13 Mar 2018

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22 Feb 2018

Product transfer: ‘Lenders might view greater adviser involvement as a problem’ 
12 Feb 2018

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08 Feb 2018

Open Banking is a revolution without the fanfare 
16 Jan 2018

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08 Jan 2018

Simply focusing on age will not fix borrowing into retirement 
22 Dec 2015

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03 Nov 2015

Customer choice has narrowed – the FCA could help fix this 
02 Nov 2015

The regulator’s differing interpretations of rules 
21 Oct 2015

Change is constant 
08 Oct 2015

Paradigm signs exclusive specialist lending deal with Brightstar 
06 Oct 2015

Landlords cash in on PRS 
22 Sep 2015

MCD – no grace but plenty of favours 
16 Sep 2015

Equity release success signals change in consumer perspective 
05 Aug 2015

Remortgagers play at ‘chicken or egg’ 
29 Jul 2015

BTL has closed the housing gap 
20 Jul 2015

Analysis: Writing a will can avoid a death blow 
15 Jul 2015

Industry deserves housing minister appointed to Cabinet 
22 Jun 2015

Waiving Stamp Duty won't encourage downsizing 
08 Jun 2015

Damned if they do, damned if they don’t 
01 Jun 2015

In the Spotlight with Bob Hunt 
26 May 2015

Election result provides stability 
20 May 2015

‘Grey borrower’ power is set to grow 
13 May 2015

Decisive election result could spur new build revolution 
27 Apr 2015

MMR 12 months on 
13 Apr 2015

Mind the protection gap 
09 Apr 2015

Analysis: Change status with the right support 
08 Apr 2015

Housing will be election battleground 
16 Mar 2015

Securing the specialist string to your bow 
04 Mar 2015

Interest rate direction is anyone’s guess 
04 Mar 2015

Regulatory B2L change is inevitable 
12 Feb 2015

Analysis: Do your homework with relationships 
04 Feb 2015

Lenders rising to the self-employed challenge 
04 Feb 2015

The sectors to watch in 2015 
06 Jan 2015

A helping hand 
05 Jan 2015

Can a landlord be truly ‘accidental’? 
17 Dec 2014

Coming in from the cold 
05 Dec 2014

Analysis: Why distribution demands inclusion 
12 Nov 2014

HSBC’s move signals cost of branch advice still rising 
20 Oct 2014

Analysis: Broker community boosted by HSBC 
15 Oct 2014

Just when I thought I was out 
08 Sep 2014

Analysis: Owning a home is not out of reach 
03 Sep 2014

Take level 4 advice exams before the FCA steps in 
02 Sep 2014

Analysis: Get set for more BoE intervention 
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Welcome to the Twilight Zone 
11 Aug 2014

Housing policy deserves seat at top table – Bob Hunt 
24 Jul 2014

MMR is enough to slow the bubble 
09 Jul 2014

Help to Buy remains in the spotlight 
08 Jul 2014

Mixed messages risk consumer confusion - Bob Hunt 
03 Jul 2014

It’s good to talk 
20 Jun 2014

H2B a rare housing policy success 
18 Jun 2014

Increasing mortgage volume will come through brokers - Bob Hunt 
27 May 2014

The better option to going direct 
14 May 2014

FCA concerned by packaging renaissance 
12 May 2014

Watch out for European regulation by year-end 
06 May 2014

Ask the Experts: Will MMR cause mass application declines? 
22 Apr 2014

Ask the Experts: Can a broker operate MMR-compliantly before 26 April? 
17 Apr 2014

Cross-sales not just for times of crisis 
16 Apr 2014

Brokers in the dock 
26 Mar 2014

Lenders in catch 22 situation over MMR - Bob Hunt 
25 Mar 2014

Paradigm launches protection arm 
21 Mar 2014

‘MMR Day’ may be a damp squib 
12 Mar 2014

Make sure your papers are in order 
12 Mar 2014

MMR lending slowdown could force protection bonanza 
18 Feb 2014

Countdown to MMR 
12 Feb 2014

A big year ahead for lenders 
04 Feb 2014

If the quality is same – why can’t AR & DA proc fees be equalised? 
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BoE is unlikely to be trigger-happy 
15 Jan 2014

We’re not in 2008 anymore 
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FCA cannot ignore views of smaller firms 
13 Dec 2013

The Prediction Game 
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Stay ahead of the regulator with CPD 
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21 Nov 2013

Living up to expectations 
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MMR compliance underpins success 
30 Oct 2013

Advisers should step up to level 4 qualifications 
24 Oct 2013

Bank of England must follow words with actions 
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Lean times leave a leaner, keener core 
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If you don't ask lenders, you don't get 
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Steady as she goes is the right approach 
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Now is not the time for procrastination 
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Improving standards is no grounds for complaint 
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The Great House Price Debate 
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