FR: With the European Mortgage Credit Directive soon to hit the mortgage market, what are the challenges or opportunities you think the industry will face in its wake?
For first charge lending the MCD seems to bring little in the way of added protection for borrowers and indeed some of the requirements such as the need for a second APR that is based on rates that might never be of relevance could cause confusion. The industry seems to be well placed to implement the new rules, which have been implemented in a very pragmatic way by the Treasury and the FCA but the MCD will inevitably take up valuable systems development resources. In the wake of the MCD some lenders may choose not to offer consumer BTL / foreign currency loans and this could reduce choice for borrowers.
FR: Why do you think the MMR was such a pivotal moment for the mortgage intermediary community?
MMR was fundamentally based on the requirement for advice to be given in most circumstances, which very much played to the strengths of the intermediary community. MMR also came at a time when some of the largest lenders had work to do to be seen as trustworthy by potential borrowers, who were therefore more likely to seek advice from intermediaries who could look more widely across the market.
FR: What benefits do both brokers and customers see from choosing smaller lenders such as Hinckley & Rugby?
I think we can be more flexible in reacting quickly to market changes and in underwriting less straightforward cases. First time buyers with little credit history probably find it easier to deal with us than with an automated credit scoring system, for instance. And the service is more personal. Brokers and customers dealing with us have a direct line to the member of staff who will be dealing with their case from start to finish. It makes a difference.
FR: With the MPC pushing back the timeline on a rate rise, how do you think this will affect the rates seen in the market?
The consensus still seems to be that rates will start to increase slowly from the middle of next year and swap rates are reflecting that. You’d think that mortgage rates would have to follow suit sooner or later and I’m sure they will, but this market is very competitive and I don’t think we are about to see any sudden jump in rates. Longer term, bank ring-fencing might create pressure for higher mortgage rates as the clearers’ domestic operations are required to stand alone, but I’m not holding my breath.
FR: If you weren’t in financial services, what would you be doing?
I’d be long retired following a successful career as a world class middle distance runner. I was only thwarted by two dodgy knees and a crushing lack of ability.
