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MAOE 2023: Product transfers are ‘a great opportunity’ in a ‘year of adaptability’ – Morley

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  • 29/06/2023
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MAOE 2023: Product transfers are ‘a great opportunity’ in a ‘year of adaptability’ – Morley
The coming year will “not only be a year of change but a year of adaptability” with product transfers and green mortgages key areas of opportunity.

Speaking at The Mortgage Administrator Online Event, Charles Morley (pictured), distribution director at Metro Bank, said that 2023 would be a “tougher market”, noting that UK Finance and IMLA gross mortgage lending forecasts for the year of £265bn to £275bn now looked “relatively over optimistic” as interest rate rises and the cost of living impact the market.

Morley continued that expectations for gross mortgage lending for this year were around the £230bn mark but this was not far off 2018 and 2019 levels.

“I think customers are going to need professional mortgage advice more than ever and also it is not all doom and gloom. Neither the UK mortgage market nor the housing market have collapsed and nearly every single lender remains within the UK mortgage market and wants to lend,” he added.

 

Product transfers ‘great opportunity’ for brokers

Morley said that product transfers were a “great opportunity” for brokers, adding that there would be “key spikes” of mortgage maturities over the months of June, July and August.

“This is an area where traditionally less than 50 per cent of business flow has been generated through the broker market but I think in 2023, we’re starting to see a significant sea change and greater activity across the intermediary sector,” he noted.

Morley continued that figures showed that mortgage maturities were going to rise by around six per cent in 2023 to £347bn, which he said was their “highest level”.

He added that UK Finance expected product transfers to reach around £212bn, but “early suggestions” imply that the figure could go as high as £220bn.

 

‘Key areas of growth” green agenda and technology

Morley continued that the “green” area of market will “develop at pace, not just because of EPC legislation but because of changing mindsets of the UK population”.

“I get a little bit frustrated about the market at the moment where we’ve got green products claiming to be green that offer a cheaper rate for an EPC A or B rating. I’m not sure they’re achieving a great deal apart from giving a cheaper rate to a new-build property,” he said.

He continued that there needed to be better education so people were aware of the EPC rating of their properties but also how to improve it.

“I think lenders, brokers and consumers have got to work together to actually drive meaningful and sustainable change across the marketplace because currently, green mortgages are far too niche and the climate crisis is not a niche story,” he added.

Morley continued that green mortgages needed to be brought into the mainstream and this would centre around price and relevant products.

“I think you will see more product development, I think, with EPC legislation around the corner, you will see a lot more than we currently have got.

“I think it will become a key product, the key choice. I think as soon as it starts to affect value of asset I think automatically it will then fire it straight into the mainstream of the market,” he explained.

 

Technology needs to ‘cater for absolutely everybody’

Morley said that this was the “first time in a long time that our industry is finally looking forward and not backwards or sideways when it comes to technology

He pointed to the pandemic popularising and normalising systems like Zoom and Teams, becoming a key part of business communication post-pandemic.

“[Technology] is going to continue to advance and I’d say to all of you is: don’t fear it, don’t resist it, embrace it because ultimately what it’s going to do is drive efficiency.

“It’s going to eradicate issues like rekeying and fundamentally it’s going to drive the process for the customer, consumer and mortgage broker,” Morley noted.

He said that he didn’t think it would be “big ticket change” but “small gradual change” that will “move the market forward”.

“I think successful firms are going to be those that combine technology with the best of their human skills and build the ultimate customer journey,” Morley added.

However, he said that technology had to “get to a point where it caters for absolutely everybody” rather than solely the digitally savvy.

“It needs to cater for somebody who finds technology tough, so therefore needs to be taken through the process all the way as well as people who are incredibly tech savvy, that can upload and do things incredibly quickly,” he explained.

Overall, he said what technology would do is “give much more certainty” around decisions.

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