What did you make of the Mortgage Market Review consultation paper?
It is consistent with the direction set in the MMR and reflects much of what we believe to be best practice. For example, strong affordability testing, expecting non-banks to be well capitalised and ensuring charging structures are fair. We are MMR-ready so these requirements are already built into our business.
Is the Financial Services Authority getting it right?
In many respects it is and it has addressed key areas. I’d like it to move more quickly so that a stable regulatory environment is reached and we can all fully focus on the real issue – bringing new funding to the market and competitive products to customers.
Do you think the buy-to-let market should be regulated?
Yes. I think customers will have better outcomes in a regulated environment but I would prioritise the second charge market ahead of buy-to-let.
What will be the biggest problem for the market going forward?
In the short term we need to get through the current economic uncertainties so that house price falls return to being a possibility, not a probability. Secondly, we need the return of a wholesale funding market as without this there will be an almighty fight for retail deposits and high street lenders will dominate with their branch networks.
Do brokers still have a place in the market?
Absolutely. Brokers will always be a key part of the market and will give customers best market advice. I’ve always used the same broker and value his advice.
What do you think will happen for the rest of 2010?
Bank of England governor Mervyn King is right – the economy will be choppy. There’s no V-shape recovery but a double dip will be avoided.
However, it won’t feel like that in some regions or industries. If you look at the latest house-price index data, London is significantly outperforming other areas and I believe this will continue.
Mortgage funding will remain tight, although some brave souls will venture into the securitisation market. Lloyds Banking Group and others such as Paragon that have quality back books can be successful.
If they are, I will enter 2011 in positive mood.
interview by christine toner