What does the future hold for the mortgage industry? Peter Hill on what he’d like to see more of in 2017
As a momentous year ends, one that has seen a number of changes in the mortgage industry and the country at large, our CEO Peter Hill takes a retrospective look back on 2016 and makes a cause for optimism in the industry for 2017. Here’s his take on what we should be looking forward to this year and areas that he would like to see improved in 2017.
Housing is rising up the political agenda
“One of the most positive things to come out of 2016 is housing policy becoming firmly embedded at the top of the political agenda. The recent changes in leadership in the Government, the appointment of a new Housing Minister and some of the narrative coming out are all very positive, and feel different from what we’ve heard before.”
“This change in political narrative has put housebuilding at the forefront once again. Looking back at the past 100 years, for the first 60, housing policy was about supply. The past 40 years have been about homeownership and, during this time, the volume of building compared to the first 60 years has reduced dramatically. The tone now is much more about supply and much less focused on specific tenures, which is a step in the right direction.”
Housing ministers need to be taken seriously
“There have been many housing ministers over the past 20 years and as it is not a secretary of state position, the role is perhaps seen as a launchpad, whereas you hear senior politicians talking about other positions in government as being the job they have always wanted. Housing minister tends to be seen as a stepping stone.”
“Where we are getting to this year is the recognition that housing really matters to the British people. It is one of the fundamentals that needs to be sorted out and it has become a crisis.”
The housing whitepaper should drive real change
“I hope to see the upcoming Housing Whitepaper being pretty clear in terms of how we make things happen. We need to start to see this as a very long-term challenge.”
“It needs to start with education policy because we are not bringing through sufficient apprentices with traditional skills. There also needs to be consideration of the efficient use of existing stock; empty bedrooms.”
“We need to ask some challenging questions around whether we are meeting the needs of homeowners in later life. Or are people finding that they are staying put because there isn’t an adequate solution? There is nothing attractive for them to move into; no pull factor.”
There’s room for improvement with regulation
“Turning to regulation, there are some areas of overlap that could be improved. For example, the Financial Policy Committee’s loan-to-income limit that was introduced in 2014. At the time the regulation had relevance, but the Mortgage Market Review (MMR) operates in parallel and does what needs to be done without additional regulatory overlays.”
“However, it is positive to see that the Prudential Regulation Authority (PRA) is not taking lightly its competition remit. We have seen clear evidence that the PRA is taking that competition responsibility very seriously. It has a specialist unit to support new entrants and challenger banks. More competition in the market is better for consumers.”
“We’ve got European and global regulation playing out, but we also have a prudential regulator that recognises that parts of the market will need support, generating different responses.”
There will continue to be a place for good mortgage advisers
“None of us are immune from the pace of technological change and embracing new technology will be a challenge for intermediaries, particularly getting their heads around where robo advice fits in to the broker proposition.”
“However, there will always be a role for good mortgage advisers. Brokers are well placed to respond to challenges because mortgages are a major buying decision not an everyday purchase. Smart consumers know that it’s a good thing to take some advice from somebody who understands the market.”
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