In the spirit of it being near to Christmas, I’m going to pick our three areas where I think mortgage stakeholders might like to see some progress made during 2019.
First up, would be around both political and regulatory interference in the sector.
For the most part there has been very little of the latter and plenty of the former over the course of 2018.
That looks likely to change in 2019 because the Financial Conduct Authority (FCA) is due to publish its final report on its Mortgages Market Study sometime in the spring.
Let’s be honest, the interim report seemed to unite the entire industry in something close to condemnation around its fixation on price.
As well as the suggestion that certain customers have no need for advice, and the attempt to put together both eligibility and adviser comparison tools.
A united voice in our market has traditionally been rare but the FCA can surely be in no doubt about the depth of feeling, particularly from the advisory sector, about what it thinks of the report.
Whether that translates into a stay of execution for some of the measures proposed is another thing entirely.
After all, regulators regulate, and we already know there are a number of working parties attempting to square various circles when it comes to those adviser/eligibility tools.
Regulatory-wise, we have benefited from a period of relative stability recently – my wish is for more of the same, but my head suggests we’ll get anything but this during 2019. Brace yourself.
Mortgage prisoner progress
Another area where there appears to have been some progress, but might benefit from more next year, is with regard to mortgage prisoners.
Ordinarily, you might baulk at the regulator asking for more powers but in this area they might well be justified.
As we know, many ‘mortgage prisoners’ are stuck in the unauthorised space and calls from the FCA to broaden its ‘regulatory perimeter’ to help those borrowers who are stuck, and yet can afford to move to different lenders on far more competitive rates, should be granted.
Affordability, of course, should remain at the heart of the mortgage decision but for these ‘borrowers that the market forgot’ there is absolutely no need for them to be in the position they are.
The regulations have, up until this point, worked against them; it’s time this was addressed.
First-time buyer focus
Finally, we move back to a favoured topic – first-time buyers and helping those who can only muster smaller deposits.
There has been much to be positive about in the FTB market in 2018 – more new buyers are getting on the housing ladder, rates have become more competitive across all loan to value (LTV) bands, access to lending up, and the extension of Help to Buy.
But the differential in terms of rates and cost between those with bigger and smaller deposits is still too high, and the numbers of products in the high LTV space, whilst rising, is still too low.
In a very true sense, we should view high LTV lending as a ‘specialist’ area and it has been positive to see more specialists and challengers treating it as such, and making their move into it.
I expect numbers of first-time buyers could grow even further if more lenders took advantage of mortgage insurance options, and coupled with ongoing government support, we could push new purchases up further.
At the same time, it’s quite obvious that the whole housing market could do with some further incentives and impetus in order to allow people to move up the ladder and to ensure purchase activity levels improve.
Changes to stamp duty might be welcome in this area but, at present, the government clearly feels it’s only a political imperative to help first-timers – that is a shame.
Such changes could make for some strong activity levels for advisers in 2019, although at the back of all our minds will be March 29th and how the UK economy ‘lands’ after then.
Let’s hope that particular ‘sleigh’ gets home safely.
