There is still a solid platform for broker and lenders to survive despite a slowdown in lending activity as a result of Bank of England intervention, slowing house price growth and the MMR.
In the last quarter of 2013 and the first half of 2014, the growth in mortgage volumes came from a burgeoning transaction market.
Help to Buy equity loan is helping up to 30 per cent of new homes transactions, leading to housebuilders managing pipelines and selling precisely what they wished in new developments.
Help to Buy mortgage guarantee, which was implemented early by the Government, has lead to an increase in 95 per cent LTV lending and has helped to spur housing transactions.
In particular, the schemes have helped first-time buyers get on the housing ladder but also to drive positive consumer sentiment.
The transaction market is still underpinned and we are in a good place compared with five years ago and we should not forget that.
Let’s also acknowledge that professional estate agents and mortgage brokers can perform well and achieve solid growth in a slightly tougher market where the weaker/late entrants may fail.
If we are to see any significant growth of mortgage lending into 2015 we are now more reliant on customers reviewing their existing mortgage and remortgaging than we were earlier this year. Now is the time to get the remortgage message out to customers and we need our messaging as an industry to be clear.
I give out a rallying cry to all of us who commentate in the media. We have to get the message over to customers: right now is the optimum time to remortgage and review your mortgage needs.
We have had solid house price inflation in a lot of areas. Although there are still areas below their 2008 peak, there are a lot fewer mortgage prisoners than the industry thought.
With some lenders still shaping their 2014 balance sheets, the pricing of remortgage deals is little short of sensational.
We have to get the message across to customers that they can save money and have peace of mind well before any bank base rate change.
The MMR has been a great success but there is still a drag on remortgaging which could affect overall volumes. That is the use of transitional arrangements by lenders.
Most major lenders will allow an existing customer who has paid up to date for the past two years a product transfer within the lender.
But they are not allowing the mortgage to be transferred to another lender without a full MMR fact find.
This breaks the spirit and intent of the transitional MMR arrangements – which were put in for that very purpose. Now that we are likely to be more reliant for our continued growth on remortgaging, any drag on volumes is unhelpful.
The key to this is customer attitude and sentiment. We must make the message plain and simple to customers – we can probably save you money if we review your mortgage.
Our continued marked growth as an industry in 2015 probably depends on the success of getting that message into the national consciousness and encouraging customers to talk to lenders and brokers about their mortgage needs.