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‘Lender broker relationship has never been stronger than it is today’ – Moloney

  • 24/10/2022
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‘Lender broker relationship has never been stronger than it is today’ – Moloney
The lender broker relationship has never been stronger following recent market turmoil, and the broker market is “remarkably resilient and professional”.

Speaking at the Association of Short Term Lenders (ASTL) conference, OSB’s group intermediary director Adrian Moloney said: “I think in recent times where things have been difficult, I certainly think the lender broker relationship has never been stronger than it is today.”

He called out mortgage lenders who in recent times hadn’t honoured pipelines, deals or reneged at the last minute.

“That is not the kind of behaviour we should have in our community,” he said.


Regulation will put us in good position to come through ‘troubled waters’

Moloney continued that Consumer Duty would be a game changer for the industry and would affect everyone in the lending chain.

“I think it affects all of us because firms, both brokers and lenders, will have to demonstrate that we’re providing a higher standard of care to our customers, not just at application or form completion, but right the way through the life cycle of any loan or transaction.”

He said that this was especially important with bridging as sales and exits may not be as easy in the coming months, so the life cycle of bridging product could be longer than it had been before.

“You will have to document why the client has bought that product rather than why they’ve simply been advised to do so.”

He said that the FCA was moving from a “principle-based outcome to an outcome based upon consumer experience”.

“Regulation is a good thing, protecting our industry is a good thing and behaving properly and ensuring the consumer is protected is a very important thing,” he added.

Moloney said that prior regulation had made the mortgage market more resilient, noting that the mortgage market in 2007 and 2008 was a “very different market”, with self-certification and fast track more common, and with fewer assessments on affordability.

He also pointed to changes to the buy-to-let market in 2016 by the Prudential Regulatory Authority also meant stricter affordability rules had been put in place for landlords.

“That will put us in a good position as we come through the troubled waters or the choppy waters that we have at the moment,” Moloney added.

“I think the broker industry is remarkably resilient and professional. I think it works remarkably well with the lenders that are in this industry. I also think that the trade body that we have representing us in all sectors has just enhanced that.”


Funding costs will ‘inevitably go up’

Moloney said that funding costs will go up over the next 12 months, adding that this had already started impacting the mainstream and buy-to-let space.

“We probably haven’t seen as much impact in bridging yet, but if the cost of funding for lenders goes up, it will inevitably be passed on in various channels. The good thing with bridging is you’re not swapping out the five-year fix, that’s a volatile market at the moment.”

He said that funding costs would “inevitably go up” but they would settle and reach a “new norm”, adding that on the regulated side he thought the market was at the “peak of where fixed rates will be.”

“The good thing is the market is well funded. This isn’t 2007 and 2008. Liquidity is in the market, and we will be able to lend, and we will be able to see through these choppy waters.”

Moloney continued: “We’ve still got a strong element of choice and opportunity for brokers and clients and that’s important. I think different lenders that are differently funded bring different things to the market. I probably wouldn’t want to set up a lender right now, but I think for those that are in the mix, there’s still plenty of opportunity.

“Now more than ever, people need to be guided through the process. They need to pick the right lender; they need to have the right product and, in terms of short-term lending, they need to be managed in terms of the time of the exit.”

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