The run-up to this year’s Mortgage Packager Summit was more subdued than in previous years, even though delegates looked forward to staying at the beautiful Monte Carlo Bay Hotel.
Despite difficult market conditions, the delegates who gathered for the event were confident that the packaging sector was ready for the challenges ahead.
The event covered a broad range of topics. Ian Stewart, head of securitisation at HBOS, and Robbie Sargent, director of Fitch Ratings, kick-started a discussion about the parlous state of the UK securitisation market. This session was well received by delegates.
There was also an interesting debate on web-based marketing. The discussions covered a variety of topics and provided insights into website design and functionality, search engine optimisation, the best use of digital media campaigns, podcasts, e-shots and even viral videos and blogs.
The packaging sector has had its fair share of negative media coverage over recent months, much of it centred on the liquidity crisis affecting the mortgage market.
There’s little doubt that certain areas of the industry have suffered more than others, with ramifications for lenders, packagers, brokers and consumers.
But it’s not all doom and gloom. We deal with a number of brokers and although the profile of their business has changed, they’ve been quietly getting on with their work.
Many have enjoyed success by focussing on more resilient parts of the market, such as buy-to-let and self-cert.
These product areas have remained consistently strong but as they require specialist knowledge they’ve been the traditional preserve of packagers.
From our own research, we’ve seen that these sectors, along with remortgaging, have helped to sustain the market and that demand remains strong. Over the next 12 months, many borrowers will be coming off fixed rate deals and our research suggests that this market is worth about £150bn.
So there’ll be an even greater emphasis on packagers to find suitable products. They will have to use their creativity to find the right solutions.
We also believe packagers can revive relationships with the brokers that they used to do business with.
One of our surveys revealed that most non-users of packagers were once users.
For whatever reason, packagers weren’t able to add value to their propositions. They now have the opportunity to put this right.
In the prevailing market conditions, packagers have had to tighten their belts and demonstrate prudence, keeping costs under control while looking for new income streams.
Product areas such as general insurance and conveyancing are making their way into the standard mortgage sales process and commercial loans are being considered too.
This also represents an opportunity for lenders to add value through their BDMs.
The business development element of the BDM role has rarely been more important than it is now and lenders can add value by helping packagers develop new income streams.
Stability has become an increasingly important characteristic over recent months, with some lenders cutting their packager panels.
One potential outcome could be packagers looking to establish quotas from certain lenders to enable them to smooth out the peaks and troughs of business.
Technology is already playing an important role in the packaging sector and will continue to do so, whether this involves the local printing of offers or the creation of integrated systems that link together the various technologies in the market to create a more streamlined process.
Technology was certainly a hot topic at the Packager Summit and, perhaps reassuringly, many conversations considered what it will deliver this year and next.
So it’s not all doom and gloom. Although there will be further casualties, there’s also cautious optimism that before the end of the year packagers that persevere will be leaner, fitter and better placed to meet future challenges.
The packagers that we deal with are some of the most resourceful and flexible firms in the market.
Time and again they’ve proved their doubters wrong and no doubt will do so again.
If any single message came out of the Packager Summit, it’s that you write packagers off at your peril.