The likely scenario is that the introduction of the MMR rules will cause some issues at first, easing with time as lenders, intermediaries and borrowers accommodate to the new environment. At BDRC, we have set in place a simple tracking study to measure this process.
This based on interviews with random samples of 100 UK mortgage intermediaries per month. The first wave was in May 2014, just after the introduction of the new MMR regime and will continue until October 2014 to track the progress of the new MMR regime towards embedded business as usual.
In May 2014, more intermediaries thought the MMR was reducing their business (35%) than increasing it (25%).
This may be a passing phase, driven by the issues lenders are having coping with the MMR as more intermediaries thought lenders were not coping well (53%) than thought they were coping well (40%).
This perception was strongly related to the impact of MMR on intermediaries’ business. Those who felt lenders were not coping well were more inclined to say the MMR had reduced their business; those who thought lenders were coping well were more inclined to feel the MMR had increased their business.
Consumers looking for a new mortgage were the other group intermediaries felt were struggling to cope with the MMR – although here slightly more thought they were coping well than not coping.
The groups thought to be handling the MMR in May were intermediaries themselves and mortgage networks. The FCA was generally thought to be doing well with MMR, but one-in-five intermediaries felt the opposite.
There is no doubt in the minds of mortgage intermediaries that the introduction of MMR has had, initially, a big negative impact on business. Most feel lenders are not coping well with MMR, causing a reduction in business volumes and having a knock-on effect on intermediaries’ own service delivery. As we move forward with our tracking, we will see how quickly this perception dissipates.
Tony Wornell is director at BDRC Continental
