Speaking during a Q&A at yesterday’s Mortgage Business Expo Manchester 2012 a panel of representatives from a variety of lenders including Barclays, GE Money, Nationwide Building Society, Platform and Virgin Money agreed that the new rules could provide a significant boost to intermediary business levels.
Sarah Green from Barclays said she expected to “see slightly more business coming through the intermediary side as we prepare for MMR”, while Mark Snape from GE Money said MMR “will help the intermediary market”. James Chidgey of Nationwide said the rule changes would be “of benefit to the intermediary as you supply whole of market advice”.
On the issue of anticipated gross mortgage lending levels for 2012 all agreed that it was likely the figure would not be much above £130 billion with at best a slight uplift in 2013.
Bank Base Rate was also likely to stay at its record low level till “at least 2014” according to Green.
There was also agreement across the panel that the Government appeared to be moving its austerity-only stance. Chidgey said “the Government’s pendulum is moving to the growth agenda” while Lee Blackwell of Platform said it was positive to see the Government moving from austerity to growth.
On the issue of whether they, as lenders, would be following a route where the level of the procuration fee was determined by the quality of the business they received, all five answered in the negative.
Blackwell suggested following this strategy would be “an administrative nightmare” for lenders. Richard Tugwell of Virgin Money said he felt procuration fees “were a blunt instrument to do this”.
Finally when asked if they thought lenders had over-reacted when it came to culling their appetite for interest-only loans, Chidgey said:
“I don’t think lenders have over-reacted at all. The MMR puts a significant responsibility on the lenders when it comes to interest-only – which is new for all lenders.”
