These are volatile times and while it is a daily dilemma for investment advisers as they grapple with the need to balance risk and reward for their clients, mortgage intermediaries have not been immune from their effects.
Market volatility is a fact of life but we need to remember there are things we can control. I say this because I am increasingly concerned about regulatory and lender activity that could compound these issues, rather than off-setting them in the search for stability.
As the eurozone faces a crisis of confidence, the UK has a wry smile on its face. We have a political environment that is relatively stable, combined with our own currency and unemployment rates that are significantly lower than many of our neighbours. It could certainly be argued that the UK is well placed to weather the current storms and it may even be regarded as a safe haven by other countries.
But although we are an island, we cannot behave like one and I am worried our housing market is in danger of strangling itself even before any eurozone funding contagion spreads to our shores.
Stringent regulation is there to protect consumers against the small minority of people who abuse the system. The majority of intermediaries play by the rules and do an excellent job but we are paying an increasingly heavy price for the small minority who do not. Regulatory costs across our industry are spiralling and this is placing a heavy burden on our profession. Just look at the FSCS levies planned for next year.
I also see an increasingly twin-track regulatory approach, with the FSA’s ongoing thematic reviews of lenders on the one hand and the implementation of the mortgage market review on the other. This will make it more difficult to run a business and plan for the future.
Regulation through the back door is now coming straight through the front door – but not necessarily in a consistent and joined-up way. Interest-only, fast-track, quality measures, to name but a few, are being withdrawn or introduced at different speeds and by different lenders. I pity the poor consumer this year trying to get through the process – and that is before they have even got close to buying a house.
We all need to work together to get the best outcomes for consumers but at the moment it all feels very disjointed.
One of the main reasons why the UK mortgage market works is because consumers receive great advice and service from a strong, vibrant and flexible intermediary profession that can respond quickly to changes in demand and funding.
The newly invigorated Association of Mortgage Intermediaries is one of the great opportunities we have to coordinate our voice and I will be working hard on the board to ensure we get heard with regulators and lenders to preserve our industry, which ultimately benefits consumers in these challenging times.
John Cupis is managing director at PMS