That was the Mortgage Market Debate, hosted by Square 1 Media, which was held under Chatham House rules but I hope they will allow me to cover some of the more important themes which I think emerged.
First, was the overwhelming positivity there is towards advisers, the job they do and the central/pivotal role they play.
The intermediary sector is thought very highly of and most believe it will continue to secure market share, particularly as lenders either don’t have, or don’t want to put, the necessary resources into trying to secure the business directly, nor do they want the risk associated with the advice given.
Plus, of course, with the mortgage market as it is – increasingly complex and prone to quick changes – the public actually want advice because they know they can’t simply go through the process on their own without a professional adviser.
Think of the mortgage market that faces the average first-time buyer right now for instance, and I would think there are only a very tiny number who would feel confident to try and ‘go it alone’.
The options available to them are many and varied, and by going into one lender’s branch or having a chat with them, they are going to miss out on all other products that could be more suitable for them.
Things will change
Second, and this also came through loud and clear via the debate, was the fact that we shouldn’t necessarily think today’s marketplace – or the way we work with each other – will be the prevailing one in years to come.
That was very clear in the part of the debate which focused on procuration fees and advice charging – just because lenders are permitted to pay proc fees to advisers now, doesn’t necessarily mean they will be for all time.
One wonders if Consumer Duty doesn’t take the mortgage market one step closer towards this potential future, albeit I’m not aware of any plans at the regulator to outlaw the payment of proc fees to mortgage advisers.
However, as we heard at the debate, this is exactly what happened in the Netherlands earlier this century and they had no history of such a thing either.
In other words, we should not feel our market is set in stone, and no doubt there will be a lot of talk about how technology – specifically artificial intelligence and the like – might disrupt our sector and what that would mean for all stakeholders. We should therefore be ready for change, and fundamental change, at that.
One voice
Finally, and this was perhaps not surprising, it was also clear from nearly all contributions that the disjointed nature of our housing market is contributing to so many of the issues we are currently facing. Lack of building in both the owner-occupier space and the private rental sector, the lack of supply in general, and specifically, the huge interventionary impact governments can have (or perhaps don’t have) in fixing the problems that need fixing.
Again, we need only look at what has been attempted in the first-time buyer space over the last 20 years, to see that it is hit and miss, trial and error, and with little thought about the wider impact in terms of house prices, affordability, supply, high loan to value (LTV) mortgage product choice, who the main beneficiaries are, planning, or infrastructure.
Many were crying out for some sort of cross-party approach to the UK housing market which could result in long-term policies appropriate for the next generation, not just the next Parliament. Perhaps a pipe dream in our combative political system but would certainly seem to be an improvement on what we’ve had recently.
Overall, one thing was clear, the market – and its various players – have to keep on talking to each other and in doing so, come up with viable solutions that we can present to government and the like. It is very easy to blame each other for any issues, but if we do have a combined voice, that strengthens our hand and hopefully gets us to a housing and mortgage marketplace that works for the many.
