Q: The implementation of the Mortgage Market Review is fast approaching, what changes are lenders to making to their intermediary channels ahead of the new rules?
A: We have already seen significant changes; recent industry data from the Council of Mortgage Lenders shows the share of mortgage lending undertaken through intermediaries has increased from just six months ago – now split 55% to 45% in favour of intermediaries, from 45% to 55% six months ago in favour of direct channels – showing that intermediaries are beginning to take a bigger share of the mortgage market.
At Santander for Intermediaries, we continue to undertake the majority of our lending through the intermediary market, which remains a key channel for Santander and one we are committed to pre-and-post-MMR.
We actually want to expand the number of products we sell through intermediaries, putting the customer and the distribution channel at the heart of the relationship and supporting our goal of becoming the intermediary partner of choice.
While the current economic conditions remain challenging for consumers, the good news is that conditions in the housing and mortgage markets continue to show signs of improvement. June 2013 showed the highest volume of completions in almost five years, so confidence definitely seems to be on the up.
This is due, at least in part, to the various schemes and initiatives currently available to new borrowers. The government’s Funding for Lending Scheme, for example, continues to play a significant role in reducing borrowing costs and we saw strong competition in the market throughout the first half of the year, reflected in our own offering of fixed rates as low as 2.14%.
Similarly, Help to Buy is having a positive impact on shaping the market. Our range of Help to Buy equity loan mortgages are available only through Santander for Intermediaries. This demonstrates both our commitment to the intermediary market and our commitment to providing a choice of affordable housing options for our customers.
Intermediaries have strong and trusted relationships with their clients and as diversification becomes increasingly important in today’s market, intermediaries can deepen their existing relationships and enhance the proposition they offer new and existing clients by establishing themselves as a one stop shop for clients.
Ultimately, the goal of the MMR is to ensure the mortgage market is sustainable and works better for consumers. We will be working hard to support intermediaries through the transitional months ahead. A key part of this will be to continue to work with our intermediary partners, helping them to write quality business and meet the needs of their clients.
