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Meet the challenge

Many in the mortgage industry found 2005 a significant challenge, with lower volumes of business, new regulation and new processes making it ever harder to focus on delivering the quality of products and service that customers have come to expect.

After a turbulent period, perhaps we can look forward to a period of calm. Sadly, all the signs are that this is not likely to be the case. We can already identify things that will change in the coming months. Regulation will be extended to cover home reversion, for example.

There are calls for the FSA to take another look at some aspects of regulation, particularly surrounding product disclosure, where everyone seems to agree that the rules create documentation which is too long, too complex and not easily understood.

There are two critically important things that must be considered when planning to implement any new rules. The first is that nothing should happen without wide consultation. Change is expensive for the industry to implement and care must be taken to ensure the correct solution is found. There must also be adequate time to make the necessary system changes.

When regulation was introduced, there is no doubt that processing capability was hit. This not only affected customers but probably had some impact on the housing market, which stalled around that time.

Similar predictions are being made over the introduction of home information packs. They may or may not affect the number of properties that are offered for sale or the speed of transactions but they will certainly affect the control that particular parties have over a transaction.

Will lenders or brokers be the prime players or will it be estate agents or lawyers? Could it be that a new breed of specialist will emerge? The factor that will obviously play hardest on the seller will be the cost and the process will only work if the buyer has total confidence in the quality of the report.

But I am certainly not arguing against change. Further extension of the regulatory regime is not only inevitable, it is also necessary. The industry has benefited from being regulated and the requirement is to ensure that consumers get a level playing field covering all products.

Neither do I have concerns that the industry will not be able to respond to new requirements. In many ways, we have shown that we have an appetite for change. Not only have we dealt admirably with regulatory and qualification requirements but new products and services continue to be introduced at a frenetic pace.

However, the complexity of the industry continues to increase, placing greater demands on all those involved. There is a need for our most basic raw material – our people – to be highly skilled. We need to continue a process of improvement and encourage high quality people to come into the industry. Every individual should be encouraged to acquire knowledge and develop their skills so that their contribution can be maximised.

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