One of these is called the Instant Mortgage designed to do (one assumes) exactly what it says on the tin via a property adviser portal which would theoretically contain all the data needed about a person and a property in order to allow the lender to deliver an instant loan.
Now, I am in no way a luddite, indeed this business is working with a number of businesses who are seeking to push the envelope in terms of mortgage tech.
Much of this is around Open Banking, which kicks off this year, and will be seeking to provide advisers with tools in order to use a client’s full banking or financial data to provide a much more seamless process around proving affordability.
What makes me far less comfortable is that this Instant Mortgage pilot appears – at this time – to exclude any form of advice, merely presenting product options to consumers directly based on the information that the portal collates.
Clearly this is in the very early stages of development but the fact the Land Registry hasn’t been able to give an answer on how advice is delivered within such a project is, shall we say, a little worrying.
In a world of more complex financial arrangements and a far more competitive mortgage product environment, the need for advice has never been greater.
The fact that over 70% of mortgages are distributed through the advice channel tells you all you need to know about this, and therefore to have a mortgage concept with no advice element seems off-kilter and rather naïve, to say the least.
The point is that, as Eddie Goldsmith points out, this might well appeal to certain lenders looking to bypass the advice channel, but I think as an industry we have moved beyond a simple presentation of product results.
This is especially so if the consumer is being left to their own devices, unsure whether this is a whole of market choice, whether these products truly suit their needs, and what sort of protections they are giving up by choosing a product in such a way.
Major room for improvement
I’m all for progress in the home-buying process. I think we’d all agree there is major room for improvement in the upfront information provided to consumers, digitisation, better communication, greater certainty around offers and ensuring that the process has every chance of completing rather than falling through.
Part of me agrees that the mortgage and lending element cannot be separated from this.
However, the Land Registry – or any other organisation embarking upon such a project – certainly needs to engage with the advisory community and build in the advice element, otherwise any attempts at moving a step forward are likely to result instead in going two steps back.