There has been speculation that banks and building societies will rein in riskier lending around the April 26 implementation date as they check systems are working correctly and the new guidelines are being met.
However Legal & General director of housing and mortgage club Stephen Smith, speaking in an exclusive video interview with Mortgage Solutions, said that brokers were unlikely to be adversely affected.
“If there is a slowdown it’s more likely to be on the lender side, so direct through branches and telephone rather than through intermediaries,” he said. “Certainly so far this year the market has been performing very strongly and we don’t see much of a slowdown on the intermediary side.
“There could be a little bit of holding back for the huge numbers of people in branches and direct call centres so they can get acclimatised to new sales techniques and the advised selling basis from April onwards, but I don’t anticipate that hitting the intermediary side of the market.”
With many lenders yet to announce their MMR plans Smith said the bigger concern would be brokers having to deal with a rush of information at the last minute.
“A number of major lenders would say they’re MMR compliant pretty much so we’re not anticipating a great deal of change between now and April. But it would be good to see some more information coming out and I have a concern it’s going to be a bit of a last minute rush.”
Legal & General underwent a series of changes last year with Ben Thompson moving away from the mortgage side to another area of the business. Smith said it was still business as usual but did say networks and clubs would have to up their game.
“I think we will see further consolidation amongst clubs and networks and I think the challenge for individual networks is to be able to make a living and make a profit once they’ve paid all the things they have to, and to cope with an increasingly rigorous regulatory regime.
“It’s not necessarily a rosy picture going forward but the ability [for brokers] to have a well-run, well structured, well financed network sitting behind their day-to-day activities is a good idea.”