It showed a noticeable reduction in the number of borrowers behind on mortgage payments over the past quarter with the repossession rate is now at its lowest level for nearly six years.
This not only points to the improved economy but also continued work on responsible lending and improved communications between all parties involved in mortgage sales.
As the market continues to grow and with interest rate rises starting to creep into view it is vital that this good practice is maintained. This should be further assisted by the tighter Mortgage Market Review (MMR) affordability checks.
Although there are concerns the MMR changes may prevent some borrowers from securing a mortgage, the findings of IMLA’s latest Intermediary Lending Outlook are reassuring.
Only 7% of lenders believe the new ‘stress tests’ will have a negative impact on mortgage applications. Ultimately, they have stemmed from common sense and are more evolutionary than revolutionary.
That said, in the findings of a recent poll conducted by Iress, nearly a third of brokers (32%) claim not to be prepared for MMR, and have not yet made any changes to the service they offer. Quality control in the form of the right processes and procedures will be of particular importance going forward in light of both MMR day in April and the rising popularity of higher LTV loans.
The best way to encourage further strengthening of the UK mortgage market is through the fine-tuning of the relationship between lenders and brokers. Success will hinge on lenders clearly articulating their approval criteria to brokers – as this will place brokers in the best position to make recommendations to their customers. This is an issue IMLA is currently engaging with.
Peter Williams is executive director of IMLA
