myi: How much do you think the unsettled economic situation is holding back the mortgage market?
Clearly it is a factor and because our economy is linked to the rest of the world, it is not something we can control on a national basis.
Many are now predicting that base rate is unlikely to move until the back end of 2012, and if this turns out to be the case, it will have implications on next year’s remortgage market.
With forecasts for HPI looking flat as well, there is a suggestion that any recovery may be geographically pocketed.
Also, amongst intermediary client banks it is being reported that consumers are in the mood to pay down outstanding debt rather than borrow more, amid concerns over job security.
The housing market has been in the doldrums and remains unsettled. How much of a factor is the perception that property is too expensive for first time buyers?
I think that people are concerned about the price of property, but another issue is the size of the required deposit.
These factors, allied to the uncertainty I talked about earlier are not a great cocktail for reigniting the market and lenders are limited in what they can do. High LTVs can be a problem for some clients if their circumstances change.
myi: Are potential FTBs opting out of the purchase market?
There is anecdotal evidence that FTBs are either staying in the family home longer or actively looking to rent.
With rentals increasing rapidly, there can be little doubt that the natural order, where FTBs provide the momentum for the housing market, has been disrupted.
There is a need for better education about the schemes available for FTBs and we are keen to work with intermediaries to help make this happen. The value FTBs add to the housing market should not be underestimated.
myi: Do you see the FTB as the key to a properly functioning housing market?
Both FTBs and first time sellers are essential to the market as they stimulate movement along the chain so the decrease in numbers of FTBs is a real concern.
Affordability and concerns over job security all play a part, but it is in the interests of all parties involved in the housing market, to help FTBs find a suitable way to get a foot on the housing ladder
myi: What can lenders do to stimulate FTBs to take the plunge?
The challenge for lenders is to make their propositions clearer for FTBs and their advisers. We need to help brokers to see that education is going to play an important part in persuading potential FTBs to step forward.
Don’t forget there is a generation growing up who have had no experience of the lending market, whereas before 2008, most FTBs were very aware of the market because they expected to be part of it.
The post-credit crunch generation need help to understand the options open to them and lenders can play a role in helping to make this happen.
Lenders can also continue to innovate, while remaining responsible. For example, earlier this year we introduced LTVs up to 90%, with some great rates, which are affordable.
We also launched a Tracker product – Freedom to Fix - which enables clients to move to a fixed rate should interest rates start to rise.
myi: We have noticed a resurgence in the BTL channel this year. Is that activity tied in any way to the problems which FTBs face?
Landlords are seeing an increase in demand which is obviously stimulating this sector. With this and lower house prices increasing yields, we expect this to expand further in 2012.
Clearly, some potential FTBs may have decided that renting is their considered option at this time but with rents rising fast in certain areas, many may decide to look again at purchase.
myi: Many lenders are targeting BTL in 2012. Where does Northern Rock see the opportunities to lend next year?
Two of the main lenders, TMW and BM have dominated the BTL sector for some time now and we expect to see an increase in the appetite of other lenders next year.
The small portfolio landlord is still an important market but we expect to see better product choice for those with larger portfolios too.
myi: Northern Rock calls itself an intermediary lender. What exactly does that mean, as most lenders have an intermediary offering?
More than 90% of our mortgage business is carried out through our intermediary partners, so they remain a key part of our business.
We do not dual price, giving brokers the confidence that the Northern Rock deal they recommend is the best one available in the market for their client.
We support roadshows and events across the country and work actively with AMI to stay focused on the market and any issues within it.
myi: Apart from the usual product and pricing message, what do you consider the most important features which lenders should be offering introducers in 2012?
Lenders need to work closely with intermediaries to ensure they are able to regularly review their clients’ needs, against a backdrop of choice, through an easy to use and benefit-laden product range.
myi: BDM models have changed significantly over the last few years. Why do you think that this model is right for Northern Rock?
We are an intermediary-focused lender and both research and feedback show that one of the key drivers of intermediary business is a face to face relationship. Our BDMs and National Account Managers provide this.
myi: Tell me about a day in the life of a BDM?
Our BDMs are re
