"It’s difficult to look ahead to the next 12 months without considering the impact the political environment may have on the housing market."
FR: You have recently moved to Pepper Money from Santander. What do you expect to be the main differences between working for a specialist lender and a high street lender?
In some respects, I think the dynamics are very similar. I have worked for both specialist and mainstream lenders in the intermediary sector and the key to both is understanding the needs of brokers and their clients.
Changing demographics, shifting work patterns and a growing mountain of unsecured debt are leading to more customers whose circumstances don’t meet the automated approach of the high street and so criteria and flexible underwriting are becoming more important for more brokers.
This is where I see the main difference. With a mainstream lender, a case either fits lending policy or it doesn’t – there’s no room for judgement. But at Pepper Money, our underwriters have the power to assess an interesting case on its own merits and make a decision based on the information presented to them. This puts more focus on offering brokers a solutions-based approach and that’s very interesting challenge.
FR: What do you think are the main misconceptions about the specialist market?
The biggest misconception is that specialist lenders are difficult to work with. Specialist cases tend to require more of a human touch than a standard mainstream application and so underwriters will review information in greater detail to help them make the right decision, but for brokers the process is exactly the same.
A short phone call to a specialist lender at the start of an application can help a broker to understand whether the lender will be able to lend and the supporting documentation it requires.
It’s a simple step that can make flexible underwriting and criteria easily accessible and could help brokers to help even more clients.
FR: What do you think will be the key issues affecting intermediaries in 2019?
Every year brings its own challenges and opportunities. It’s difficult to look ahead to the next 12 months without considering the impact the political environment may have on the housing market and it would be prudent for brokers to plan for ways to grow their business in a flat market.
Fortunately, there is increasing opportunity for brokers to help a growing number of clients and so I would say the key focus for brokers should be to make the most of the available opportunity.
FR: What do you expect the outlook to be for buy-to-let?
Buy-to-let has absorbed the regulatory and tax changes that have been thrust upon it in recent years and demonstrated resilience with activity levels holding up well. I think we can expect this to carry on, but the market has changed, with more landlords holding their investment in limited companies. So, I’d expect to see the continued growth of limited company buy-to-let.
FR: What can we expect from Pepper Money this year?
We will continue to make it easy for brokers to find a home for their interesting cases. We’ve invested in experienced product development and sales teams in 2018 and will continue to work closely with our intermediaries to deliver solutions and improvements to our proposition. We are, of course, also working towards a banking licence and we are building towards a very exciting future.
FR: If you could see one headline about the mortgage market this year, what would it be?
I’d like to reach a point where more people have the confidence to speak to a mortgage broker about their individual requirements, even if they are recently self-employed, have complex income or experienced credit blips. We know that a lot of potential homebuyers or remortgagors wrongly write off their own chances to secure a new mortgage and, as an industry, we need to work harder to show customers the opportunity that is open to them.
