FR: Mortgage lending recently saw the best month since 2008 – have you seen a noticeable improvement in the market recently?
In the intermediary market Nationwide can trace the first upturn back to 2011 through into 2012, but there is no doubt that 2013 has so far seen a significant uplift in new mortgage business, as confidence returns across various lending sectors and regions of the country. Housing is such a pivotal need for consumers that decisions to buy, remortgage or move cannot be put off forever as new households form, be they young adults leaving home, couples expecting children, marriages breaking down, job relocations, down sizing, etc. The funding that is now available for mortgages through the Funding for Lending Scheme, and for new build houses with Help to Buy Equity Share, combined with consistently low priced mortgages and economic stability, is helping buyers feel more confident in making their housing decisions. And a Floridian summer has arrived in Britain to make us all feel much better about our prospects!
FR: What do you think the next 12 months holds for the mortgage market?
I predict more good news! The momentum in activity is building this year and many broker firms are reporting increased business with adviser recruitment back on their agenda, following the doldrums of the last five years. Funding for Lending has been extended into 2015, giving greater stability for lenders to fund mortgages, and also push out their criteria boundaries. The Government’s Help to Buy Equity Share fund of £3.5bn in England appears to be the fastest growing housing initiative since Margaret Thatcher’s Right to Buy scheme back in the 1980’s. Discussions now centre on the Mortgage Guarantee version of this scheme, which brings in all residential property, not just new build. So the next 12 months look reasonably bright for mortgage intermediaries, assuming we have no further economic shocks from Europe, or wider afield from China or the US.
FR: Nationwide has been a key player in the Funding for Lending scheme – do you feel the impact of the scheme will continue to grow in coming months?
Yes, as we go through this year, we will continue to be a major net contributor to mortgage growth and expect to lend more in gross volume this year than we did last, which itself was 17 per cent up on our previous year’s lending. The assistance and stability that the Funding for Lending Scheme is providing to the mortgage market has been invaluable and we will see higher gross lending in the market this year, taking it to more than £150bn for the first time since 2008. Indeed, with the current trajectory of lending, we may hit £160bn, a major achievement for the market from the £143bn last year, and the great majority of this increase will be written by intermediaries.
FR: What are the biggest challenges facing intermediaries at the moment - and how does Nationwide aim to help intermediaries in light of these?
The most immediate challenge for intermediary firms is to begin planning for the new mortgage regulations that come into place next April. While more, Business as Usual than Big Bang, the MMR rules will still have a conservative impact on the market, but hopefully for not as long as when we first entered statutory regulation back in 2004. I am confident most firms already have good procedures, processes and record keeping policies in place, so it will centre on ensuring the client is suitable for the mortgage product by reference to the ‘appropriateness test’, understanding the changes in lenders affordability requirements, and then making a full submission to the lender in accordance with their published criteria.
FR: If you weren’t in financial services, what would you be doing?
Running my own corporate hospitality company. I have been privileged over the years to attend numerous sporting and industry functions at home and abroad with Nationwide, and as a guest of various mortgage distributors, so I have learnt how to make the party swing!
James has been involved in mortgage lending through intermediaries for over 25 years, formerly with UCB Home Loans, and now with Nationwide For Intermediaries and The Mortgage Works. He is responsible for the sales distribution through the major corporate partners of Nationwide and has witnessed the consolidation of the industry through the various mortgage networks and clubs we have today.
