The Intermediary Mortgage Lenders Association (IMLA) represents the views of some 25 UK lenders involved in the generation of mortgage business via intermediaries.
This area is probably the fastest growing of all markets, offering a complete range of mortgage products for all types of customers, while providing no shortage of news, views and speculation on the future of the mortgage market itself. Most of these views agree regulation will be the biggest driver of change over the next few years and all are interested in the shape it will take and how much of it is up for debate.
The industry has had time to digest the Treasury’s draft, Regulated Activities Order. It has also absorbed the new definitions of advising and arranging and responded to the consultation. Between trying to write business ‘ sometimes it is easy to forget that is our job ‘ the next thing to hit our desks will be the consultation paper from the Financial Services Authority (FSA), due later this month, saying how it intends to interpret its new powers.
Later this summer we will receive the outcome of the FSA depolarisation review and while we cannot predict with any certainty what this means for the mortgage market, we are sure to see a shift in distribution.
Regulation will no doubt bring costs and these are likely to be felt disproportionately by smaller intermediaries, but there needs to be latitude within the regulation to ensure their valuable service can continue.
At the moment, there are mixed views on the value of the packager, but there is still likely to be a lot of packaged business being transacted in 2004.
Will these packagers be involved in arranging and need authorisation? The view of IMLA is that this should depend on whether the role is influential on the buying process or purely administrative ‘ for this, we will have to wait and see.
Networks are also likely to grow, just as they did following a similar level of regulation in the life market. They are likely to be a key distribution area. However, they are still expensive for intermediaries to use and command significant negotiating weight with many lenders in terms of margin pressure.
Mortgage clubs have been strong for some time, but it is likely these will look more like networks as the range of services and support they offer increases.
The changing face of the industry in light of regulation and the questions they pose is something I am sure that IMLA will remain focussed on for quite the foreseeable future.
Tony Ward is chairman of IMLA