"The scale and quality of our operation has enabled us to secure a number of new mandates, including three new entrants to the mortgage market who will launch over the coming months"
FR: Computershare recently took on the servicing of UKAR’s book and now services more than half of outsourced mortgages in the UK – what has this meant for the business and what plans do you have for the future?
Over the summer, Computershare was delighted to welcome 1,700 colleagues to our new Loan Services business following our appointment by the UK government to service the mortgage book of UK Asset Resolution. The change saw the volume of assets that Computershare manages increase significantly, meaning that as well as being acknowledged as the UK’s leading third-party mortgage servicer by international ratings agency Standard and Poor, we’re also the largest by some stretch. The scale and quality of our operation has enabled us to secure a number of new mandates, including three new entrants to the mortgage market who will launch over the coming months, and provide a compelling proposition to retail banks looking to outsource legacy portfolios.
FR: What opportunities are there for mortgage providers looking to outsource their administration?
There are three major groups that can derive substantial benefits from using the services that Computershare provides. The first is new entrants, who experience high costs when starting up in the mortgage industry. They don’t want to invest large sums in new platforms, and recognise a real advantage in finding support in meeting their substantial risk and compliance obligations.
Computershare can offer them a service on a transactional basis, which means that costs are proportionate to their income, allowing their businesses to thrive. The second group are those buying portfolios, which are typically private equity houses, such as Cerberus, who bought part of the UKAR book and retained Computershare as an administrator. They will not typically have their own servicing capability or the desire to develop it, and the service we provide includes everything they need to meet their regulatory requirements too.
The third group is retail banks, many of whom have ‘legacy’ platforms that may not have received a great deal of investment and are not aligned to help their users easily meet compliance requirements. Computershare can support them in consolidating their portfolios onto our single platform, which can dramatically reduce the cost of meeting the necessary regulations. It means they are freer to concentrate on making the most of some of their other opportunities, such as digital banking and customer experience.
FR: You have a large presence in the North – do you think the financial services industry has become more of a level playing field across the UK and will this continue post-Brexit?
The north has a thriving and resilient financial sector, and we are very proud and enthusiastic members. Computershare is fully committed to playing a leading role in the creation of a Northern Powerhouse, not only through financial success and growth, but also through supporting communities, sharing knowledge and investing in the future of Yorkshire and beyond. We’re delighted to be currently working with The Money Charity to improve financial wellbeing and have donated £20,000 to fund money management workshops for young people across Yorkshire, where over 1,600 of our colleagues are based.
FR: Do you foresee the supply and demand issue getting worse? What more can be done to ensure that people continue to have access to the mortgage market?
Fundamentally, I believe that the country needs to build more homes and, until this issue is resolved, it’s likely to remain the strongest influence on the housing sector. Beyond this, households benefit when there is a broad range of mortgages on offer, and outsourced mortgage servicing helps generate a diverse and competitive market. In particular it’s clear that buy-to-let property is going to remain an important part of the nation’s housing solution, and the expertise that Computershare provides within both the buy-to-let and resident mortgage sector can bring great benefits to both our clients and their customers.
FR: How do you think the Referendum and the Base Rate cut will continue to affect the mortgage market in the coming months?
As mortgage administrators we’re often one of the first places that people experiencing issues turn to about their money problems. We do everything we can to help customers avoid and recover from financial difficulty and, after over 25 years in business, we can predict accurately which accounts are likely to fall into arrears. We can see therefore a clear historical correlation between higher interest rates and people falling into debt on their mortgage, and a decrease in rates will obviously make it easier for some customers to make their payments.
However, the education and outreach work that we do in conjunction with our charity partners emphasises the need for customers to build financial wellbeing that is not dependent on good fortune or variations in government economic policy. It’s all part of our approach that provides support to clients and customers from the day a loan completes to the moment that final instalment is made.
