Urgent necessity prompts many to do things

15 Sep 2010

Within a few days this week we saw a somewhat mixed picture in terms of the mortgage market and the levels of lending currently being achieved. 

Reflecting on 2009, the CML released its gross mortgage lending figures for the year and they showed the real and, seemingly ongoing, affect that the Credit Crunch and subsequent liquidity crisis has had on the market. 

Gross mortgage lending in 2009 fell by a substantial 43% to £144 billion, a greater percentage fall than in 2008 when the total fell by 30% to £254 billion from £363 billion in 2007.

It seems somehow bewildering to even contemplate those last two figures given that the fall in lending has been so sharp. 

Can it really only be three years ago when lending was over the £350 billion mark? 

It must seem like a lifetime ago particularly for mortgage-only advisers who have been at the sharp-end of such a huge market shrinkage.

Those expecting or hoping for a pick-up in the figures for 2010 are also likely to be disappointed if we are to take the CML’s own predictions for the year as believable. 

Last month it shifted down its gross lending figure prediction to £140 billion and said that ‘strong headwinds’ would result in 500,000 less property transactions than it had previously anticipated.  In effect the CML believe it is likely to be a case of ‘as you are’ this year with no great change from the levels we saw in 2009.

While the CML’s data hardly gave many reasons to be cheerful, figures out this week from the FSA at least provided a few more positives to hold onto. 

Its data for the second quarter of the year showed new mortgage advances totaled £36 billion, a 14% increase on the first quarter and 8% higher than the amount advanced for the same period in 2009.  Its figures for new commitments also showed a marked improvement, up 20% to £41 billion on the previous quarter.

These figures are only likely to confirm what most advisers will already know; mortgage business levels in 2010 are a world away from what they were in 2008, let alone those seen back in the days of 2007. 

Those who may have been expecting a significant step forward this year will be left disappointed and all signs for next year show that any major boost to the mortgage market are as yet unseen.

In effect, the numbers being mentioned will surely point advisers in the direction of further diversification into other product areas and sectors to supplement their work in the mortgage market.

Cervantes said: “Urgent necessity prompts many to do things,” and it truly is the same message we have been pushing for the last couple of years, namely, advisers need to keep focusing on aligned revenue-generating initiatives, improving their cross-selling ratios and taking the many alternative opportunities available with the mortgage sale such as general insurance and protection as well as branching out into other financial advice-related areas, perhaps equity release, bridging or even focusing on other income-generating areas such as wills and legal services, many of which would be very much welcomed by the clients concerned.

The fact is that there are major, significant events coming over the horizon that may well dampen the mortgage market even further, namely the Mortgage Market Review. 

We are already seeing a pull-back from lenders in terms of their appetite for interest-only loans because of the proposals detailed in the ‘Responsible lending’ paper. 

Self-certification and fast-track will also be curtailed significantly, perhaps to the point of extinction. 

We should also not forget the new capital requirements placed upon banks by Basel III are likely to mean less funding is made available, certainly in the short term. 

Whilst there is positivity to be had though with the news that RBS is launching a £4.7 billion securitisation – where any opening up of the wholesale markets is to be welcomed - we are a long way from the improvements required to make a meaningful difference.

A continuation of the current situation for the foreseeable future means those in business must look to the other opportunities outside of the mortgage sector. 

To make the most of these it is often a case of getting up and running quickly and effortlessly, and as a distributor with a wide range of ready-made solutions in numerous product areas, we can help you achieve this. 

The one-stop-shop does still exist – why not make the most of it?

Bob Hunt

Blog Archive

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10 Dec 2018

Brokers’ fortitude will see them through this ‘depressing and dispiriting’ situation 
10 Dec 2018

Paradigm CEO Hunt invests in mortgage switching platform Dashly 
19 Nov 2018

We should be confident despite the uncertainties 
14 Nov 2018

FCA should leave mortgage market alone until Brexit uncertainty lifts 
09 Nov 2018

Not following EU rules could benefit the market 
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

Advisers can help landlords get their skates on for HMO changes 
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

Take control to signpost clients in your direction 
22 Feb 2018

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

Buy-to-let advice is needed more than ever 
08 Feb 2018

Open Banking is a revolution without the fanfare 
16 Jan 2018

Land Registry needs to engage with brokers over Instant Mortgage 
08 Jan 2018

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

Reduce the regulatory burden for firms by reallocating money from FCA fines 
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 
20 Aug 2014

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? 
30 Jan 2014

BoE is unlikely to be trigger-happy 
15 Jan 2014

We’re not in 2008 anymore 
09 Jan 2014

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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Don’t let booming business hamper MMR preparation 
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 
02 Oct 2013

Lean times leave a leaner, keener core 
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If you don't ask lenders, you don't get 
22 Aug 2013

Steady as she goes is the right approach 
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Are we about to see a broker boom? 
16 Jul 2013

Now is not the time for procrastination 
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Improving standards is no grounds for complaint 
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We can’t rely on external stimulus 
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Mutual Magic 
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Does the FCA understand human frailty? 
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Has the mortgage market regained its mojo? 
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Help to Buy plus prudence equals prosperity 
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Will George Osborne be having a flutter ahead of the Budget? 
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Size matters on capital adequacy 
04 Mar 2013

Mortgage Indemnity Guarantees: helping first-time buyers fly 
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HS2? I’d rather see more houses built instead 
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95% LTV mortgages are not back... yet 
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Regulators have listened to feedback 
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The Great House Price Debate 
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Keeping your clients' wills up to date 
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