It really has been an interesting start to the year, with the return of something we have not seen for all too long; positivity.
The good news is that it is not just the hopeful bleatings of brokers kidding themselves that ‘this will be the year Rodney’, or the bland PR mutterings of lenders playing the game, but something that seems much more solid. Even, and that should probably be written as EVEN! the national press have begun to join in with the release of various well written articles all sounding scarily positive.
It is interesting to see what effect this new attitude has on the industry, almost as if people are slightly scared of uttering the word because they half expect everything to come tumbling down upon it’s mere mention. Cautiously optimistic has long been my particular favoured phrase.
Although there are doubters, the Funding for Lending Scheme has started to have a profound effect. Whether or not banks really do utilise it properly or not, it has enabled a change in attitude, a ‘we want to lend and we actually can’ dynamic.
With prime time TV audiences seeing the first adverts during their favourite programmes, (for those who don’t Sky + everything of course), Barclays announcing the return of 95 per cent LTV borrowing and basically saying we want to lend these days; that is a welcome change of tone that is beginning to filter through.
Every lender meeting I have had this year involves a “we want to double/treble/increase by x per cent our lending this year”, although by my maths if you add up the promises this becomes a market of around £999bn or so! This is clearly not going to be the case, but the point is that the appetite is returning.
For lenders to hit these targets, however, we need to see tweaks in underwriting criteria, slight, sensible relaxations that help people rather than block perfectly good borrowers from moving. Ridiculously low rates getting ridiculously lower is nice to have of course, but that is not the issue for most borrowers.
We need more innovation in the guise of both Barclays’ and Clydesdale’s recent products. More large loan lending from the high street rather than relying on the whim of private banks. Other simple wins such as regulators reducing capital requirements for higher LTV loans that are backed by mortgage insurance companies.
The good news for us beleaguered brokers is that we will no doubt have to do the lion’s share of any increase. Branches have proven that they are inadequate in this regard.
But before we start getting carried away and booking our conferences in Dubai once more, we have to strike a note of caution. With all the scandals and accusations of misselling continuing to rage, we have to continue to focus on professionalism more than ever.
We have to make sure that our message of proper independent advice and good service is listened to and understood. So take to your pens, laptops, social media and twittersphere and get the message out.
Lenders are lending, products are competitive and independent advice is the future. This time next year, Rodney, this time next year!
Andrew Montlake is director of Coreco