The Financial Conduct Authority (FCA) is to release its final report of its Mortgages Market Study, which is sure to give the industry plenty to digest.
Economic and political uncertainty could also have a significant impact on activity.
We asked this week’s Marketwatch panel what they expect the year ahead to hold for advisers and the mortgage industry.
David Hollingworth, associate director at L&C Mortgages
It’s very hard to approach anything that might purport to predict the year ahead, when Brexit looms so large on the horizon.
The shape of the economy looks likely to be highly dependent on how the process plays out and that is likely to have a substantial bearing on the mortgage market.
In the near term, uncertainty looks set to be the watchword and borrowers may well want to shore up their finances against any perceived downside of our exit from the EU.
Certainly it puts a question mark over the direction of interest rates.
Although weakening in sterling would see a higher rate of inflation, the Bank of England may decide not to raise base rate if it felt the economy required support.
It could in fact lead them to feel a cut in rates would be more appropriate.
A smoother exit and we could be looking at the recent lift in interest rates being followed with more increases.
All this still suggests that borrowers will be keen to fix their mortgage, especially as rates remain extremely low.
The remortgage market is therefore likely to be hugely competitive this year, especially as the purchase market could be hamstrung until there’s more clarity around the impact of Brexit.
Advisers can play a key role in helping borrowers navigate their way to a solution but there will be plenty of competition for that business.
Technological advancement offers an opportunity to advisers and lenders alike, both in offering a better customer experience as well as greater efficiencies by removing needless duplication and rekeying.
That progression should only help customers engage in active management of their mortgage in the longer term.
Jeremy Duncombe, director of intermediary distribution at Accord Mortgages
Brokers will be all too aware that technological change has had a significant impact on the mortgage market in recent years.
This is set to continue at a growing pace throughout 2019 and beyond, with mortgage lenders looking increasingly to improve customer experience in a competitive market.
With the speed and momentum of digitalisation increasing at a growing rate, technology is taking a greater role in helping borrowers through the mortgage process.
Brokers understandably may feel nervous about this.
It’s easy to look at the negatives, but change brings opportunity as well as threat.
Robotics and artificial intelligence are set to improve the mortgage market for the better – and can benefit brokers too.
Technology can help them play to their strengths.
Three out of five people want face-to-face advice when they take out a mortgage.
And as our lives become busier and our customer service expectations higher, borrowers will increasingly look for expertise and convenience when trying to navigate the market.
Perhaps more importantly, lenders being able to make faster offers and complete mortgages more quickly will benefit everyone.
Technology will mean less paperwork and quicker mortgage turnarounds. As well as the obvious benefits for clients, smoother processes will give brokers more time to focus on their clients and enhance their knowledge.
Computers can do amazing things, but they are not human.
Brokers who put their clients first and provide empathetic, individualised and excellent service will benefit from the coming technological change.
John Phillips, operations manager at Just Mortgages
There is no getting away from the fact that 2018 was a funny old year for the mortgage industry.
The first half was fairly stable, following record first-time buyer levels at the end of 2017.
And the second half was pretty tough as purchases dropped significantly and house prices started to fall.
But while purchase was down, remortgaging was at its highest level in a decade and I think this was down to a number of factors.
First, many borrowers who had come to the end of deals looked to lock in low rates before any more rate rises took effect.
Second, those who had perhaps wanted to move but were put off by the political and financial uncertainty of Brexit looked to remortgage in order to fund extensions rather than move.
And third, I think brokers started focusing more on their current client base rather than trying to chase new purchase business that wasn’t there, which resulted in higher levels of remortgaging.
Going forward into 2019, I think we are going to see much of what we saw towards the end of 2018, and then we will see purchases pick up again towards the end of the year.
I think after Brexit, when things are a bit clearer, many of those people who had been putting off buying or moving will come out of the woodwork.
There will be plenty of opportunities for brokers in 2019; purchases will pick up, but I don’t think remortgaging will slow down.
If anything, those brokers who have been working hard on the remortgage and protection side of their business will continue to reap the rewards of valuing their customer base.
