While we may have a few months to go before the year end, we are quickly reaching that time where a legal completion before Christmas becomes something to hope for rather than anticipate.
With business volumes having increa-sed quite significantly over the past few months, many advisers are also likely to be explaining continuing delays to their clients as those in the process – lenders, surveyors, conveyancers – attempt to keep pace with the increasing demand. With this in mind, it is not surprising that the focus is shifting towards 2014 and what this has in store for the mortgage advice profession. Certainly, there appear to be plenty of positives, however, these come with a number of potential bumps in the road. There are some game-changing elements to 2014 which could result in a different mortgage advice landscape.
The safe prediction is that the mortgage market will continue to grow next year. At the recent Financial Services Expo, a panel of major lender representatives were all asked what gross mortgage lending could be in 2014.
There were a mixed array of answers but not one of them suggested levels would fall, with the consensus suggesting at least a 10 per cent increase on 2013 which looks likely to end up being around the £170bn mark.
The main beneficiary, at least short term, of this improved marketplace can be the advisory sector. Lenders have much to prepare for, with the MMR to be implemented at the end of April and therefore the intermediary distribution channel could well be the go-to place for lenders to secure market share while they ready themselves.
However, we should all be mindful that the lenders operating direct-to-consumer propositions are not going to ditch retail distribution. It was interesting to hear, again at the Financial Sercives Expo, that lenders such as NatWest and Nationwide, which both have considerable branch networks, are ploughing a significant amount of resource into retail and will need to feed this part of their business with competitive pricing in order to sweat the asset. The anticipation is that post-MMR we may see some lenders shifting away from an intermediary focus back to their direct origination.
Another potential boost for intermed-iaries is,of course, Help to Buy 2. Even though the scheme has been accelerated, I suspect most of the participant lenders are not going to do so before the start of 2014. Recent research from Santander suggests there is going to be huge demand for the high LTV products – presuming, of course, that lenders want to be active in these bands. It revealed that around 1.6 million people could be looking to purchase via the scheme. I might suggest this is highly unlikely given the capacity available and lenders’ appetite in the high LTV area but it is reasonable to expect there will be a further surge in interest just as soon as more lenders commit.
Advisers need to ensure they are marketing themselves effectively and they are providing a quality service which will result in repeat business and referrals. There is everything to play for.
Rob Clifford is chief executive of If I Were You