It took twenty two years for the next piece of legislation to come along to shake up our market – the Building Societies Act 1986. Can you imagine being left alone by the regulator to just get on and run your business for twenty two years? And left alone during that period, societies grew their branch network, their customer footprint, and helped owner occupation to rise from circa 50% to over 65%. Not a bad run really.
These days, we implemented new regulations in April – the MMR – and by September we are undergoing a Thematic Review, with the findings and perhaps changes due next Q2. The pace does not let up, does it ?
And alongside the findings of the Thematic Review, and any modifications to MMR that are required, we will also receive the outputs from the consultations (Treasury and FCA) on the European Mortgage Directive and perhaps the details as to how these will be implemented, the Spring after next.
And what with all this change, and the pension changes, new lenders arriving, Help to Buy and Funding for Lending, new powers for the PRA, the devolution vote, plus all the lobbying about housing in the run up to next year’s General Election I can safely say that I have never, in my 36 years in this industry, known a busier time.
But perhaps we have grown accustomed to change, and have grown in our ability to adapt to it? Certainly, the intermediary sector took MMR in its stride and did not falter in producing volume and quality business for our lender partners. Not quite the same calm progressive state in lender branches and direct operations I think. But as a result, intermediaries end the year as the dominant distribution channel, producing around 65% of all new mortgage business.
At the Legal & General Mortgage Club we are looking forward to 2015. We will have been in business for twenty years and we think it is going to be another good year. We have new lenders to launch, and we believe we will see some further growth in gross lending, perhaps of up to around £225bn.
This remains a long way short of the £260bn or so that we believe we need to get back to the long-run average for housing transactions, so we know there is still pent up demand in the market, which, along with our continued inability as a country to build enough houses, should underpin activity levels for brokers and lenders alike.
We also anticipate further moves upward in procuration fees, from enlightened lenders, who realise the need to pay an appropriate level of fee to the intermediaries who bring their business to them.
Yes, the General Election campaign may throw up a few wobbles – to our market and the markets overall, particularly since our electoral system means that nobody can call any result with any degree of certainty at all – but it won’t be a dull year. Be confident, invest in your business. Our market is heading in the right direction.
