A belated welcome to 2018. For those of you who are glad to see the back of last year, which turned out to be a bit of a slog for many at the end, there is some solace to be found in the general positive feeling that pervades a fresh start.
This is the time when everything gets reset to zero; last year’s achievements wiped from the memory as the battle begins again to build up pipelines, banking and fresh clients. It is like the start of a new football season: full of hope and expectation.
And this year there is much to look forward to. Forget the fact that Brexit is still on the horizon, that our politicians continue to squabble over things they pretend to care about and that the Doomsday clock has moved forward by 30 seconds to two minutes to midnight, the closest since 1953. Yes, nuclear threats and climate change aside, I remain very bullish about this year.
There definitely seems to be a more optimistic vibe with most brokers I have spoken to. The many people who had put their life on hold since the EU referendum are ready to do something.
First-time buyers are returning to the market as property prices stagnate, stamp duty cuts assist and mortgage rates remain at low levels.
What is more, competition among lenders is set to be the fiercest for years. If I add up all the plans for lending from players I have spoken to, it seems like a £300bn market will be easy.
Of course, this is unlikely, with gross mortgage lending of around £260bn a more realistic aim.
But that is without adding in the product transfer market — something that will be a big part of many brokers’ lives this year.
Where this is concerned, we need to be careful around how we approach it; it cannot be the easy option. We have to make sure we work hard to prove it is the best option for the client, looking carefully at their requirements and reviewing the term, repayment method, offset options and so on.
If a lender gets to the client first, we must respect that and work hard to make sure our own servicing is robust, efficient and offers real choice.
Some lenders will be disappointed as they struggle to make the impact they hoped for. Rate alone is not enough these days; service is key but criteria will make all the difference.
There are still many borrowers who struggle, whether it is due to affordability and stress testing, the nature of their work and income, their age, their interest-only requirements or some other issue. More needs to be done in terms of choice.
We must ensure there is a robust replacement for Help to Buy, along with lending on alternative methods of construction.
Year of technology?
Then, of course, we have to consider whether 2018 will really be the year of technology. I have mentioned before how much rubbish and misinformation there has been on this subject, and tech providers and brokers need to be very transparent about their offerings.
We cannot allow tech to be an excuse for watered-down, inferior advice. It has to set the bar higher.
Commoditising the mortgage is a danger that does not help brokers or lenders. It particularly does not help consumers.
Lenders need to work more closely with brokers. Let’s talk more. We are partners in this, not enemies, and we need to stand together in the face of changes.
We need to educate the public, we need to shout about what we do, why we care, why in December every year we collapse in a heap in front of our families whom we have not seen for months, tired from making sure clients can enjoy their first Christmas in the freedom and security of their new home.
We all need to up our game. We are not compared to each other any more but to the last, best service interaction a client has experienced, whether with Amazon, Uber or AO.com.
Let’s make 2018 the Year of the Broker: the year of advice, the year of education. But let’s not forget what is important and let’s have some fun. I wish you all the very best this year. Let’s be careful out there.
In the markets, meanwhile, three-month Libor has increased to 0.53 per cent while swap rates have risen in expectation of a spectacular new year.
- 2-year money is up 0.25% at 0.89%
- 3-year money is up 0.18% at 1.02%
- 5-year money is up 0.12% at 1.21%
- 10-year money is up 0.09% at 1.46%
What really grinds my gears?
In the face of the latest controversy around The Presidents Club charity dinner and the treatment of women generally in business, it is high time everyone left old, anachronistic attitudes firmly in the past and moved into the modern age.
The fact 500 firms recently revealed figures to show “gender pay gaps of more than 15 per cent in favour of men for mean hourly pay” is bad. But the worst firms were quoted as having a difference of 64 per cent.
How is this still an issue? Of course we need to make sure we pay people the same according to their job role. And we need more females in management positions and at top levels.
Some progress is being made but it is slow. I would encourage all of us to engage with the Women in Finance Charter.
Andrew Montlake is director at Coreco